When it comes to your home energy, you want a broken boiler as much as you do a high energy bill, and while we can help with the best boiler repairs Bradford has to offer, according to the Competition and Markets Authority (CMA), it might well be consumers who are causing their own bills to be higher.
The CMA entered into a gas and electricity market investigation after a surge of energy prices between 2004 and 2014 to diagnose whether price levels were reflecting true cost or whether the energy companies were hiking prices for their own gain.
However, according to Money Facts, their report found that in fact the energy companies had not been manipulating their prices to produce excessive profits, and in fact, it’s down to the consumer who isn’t making the most of their energy deals.
Of the respondents to their report, 56 per cent said they had never switched their energy deal, while another 34 per cent said that they had never even considered it. This has led to energy suppliers not having to change their prices to keep their consumers, as competition is one of the ways to regulate prices in a market.
Perhaps worse, consumers are also lax in changing from the standard tariff with energy suppliers – which just so happens to be the most expensive one. In certain situations, changing tariff could save you hundreds of pounds a year according to the report.
Despite not finding the energy companies at fault, the CMA has put forward some ideas for ensuring the industry works better for everyday energy consumers.
The report said: “Our remedies package will revitalise the energy market, intensifying competition between energy companies to bear down on costs, ensuring customers can make informed decisions about the range of options open to them and encouraging the development of smarter regulations that work in consumers’ interests.”
They propose a new framework that helps to make the market more competitive and better educate consumers about when they should switch their supplier or tariff.
However, not everyone is happy with these results. The Daily Mail has reported that they will water down the evidence that energy companies have overcharged families more than 1.2 billion a year. This evidence suggested that energy companies made small cuts to tariff prices over the period of 2004-2014, but this was dwarfed in comparison to a 30 per cent fall in the cost of gas and electricity at wholesale.
The CMA have proposed a cap to the number of tariffs on households on a prepayment scheme, however, critics believe the cap should be wider ranging to help stop confusion among consumers on the best deal available to them. It’s believed the CMA’s findings will cause a U-turn on the cap of four tariffs currently on offer, which was only introduced two years ago.
Other concerns by energy suppliers, listed by the Evening Standard, is that the proposals will lead to extraneous and confusing junk mail being sent out to rival customers trying to solicit switching supplier. They call this proposal a “spammer’s charter”!