Millions on standard variable tariff for over three years
1st September 2017 | Residential Energy
More than a third of UK customers have been overpaying for their gas and electricity on a standard variable tariff (SVT) for at least three years, it has emerged.
It’s estimated that more than eight million customers have been on a non pre-paid SVT with one of the big six energy suppliers – British Gas, EDF, Npower, Scottish Power, SSE and Eon – since at least 2014, an analysis from energy watchdog Ofgem has shown.
The average annual SVT price was at least £55 more than the supplier’s cheapest tariff at each of the big six, according to Energylinx – a price comparison company. It means many customers are paying more than they need to.
Overall the Ofgem data showed that as of April 2017, some 14 million gas and electricity accounts (64%) were pegged to a SCT (this figure includes customers on such a tariff for less than three years). Bus despite the high numbers, the watchdog says an increasing number of people are opting to switch their gas and electricity providers.
In June, there were 310,000 gas switches – the highest for this month since 2009. And although electricity switching fell slightly between May and June this year, to 380,000, this was still the highest level of June switches since 2011.
What is a SVT?
An SVT is an energy supply contract with no fixed length applying to the terms and conditions. The other main type of contract is a fixed tariff. As opposed to an SVT, this will last for a specified period of time, usually one or two years, and during this period you will pay a fixed amount of money for each unit of gas or electricity which you use. However, it doesn’t mean that your bills won’t rise – that depends on your usage.
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