Citizens Advice has called for suppliers to be set annual targets to force them to shift all their customers off “expensive” default tariffs by 2020.
The charity repeated its demand that a price cap be implemented for the poorest households but said a target is also needed to help the millions of less vulnerable customers who are also stuck on a standard variable tariff (SVT).
“Gas and electricity bills have skyrocketed for loyal customers over the last year,” said Citizens Advice director of energy Victoria MacGregor.
“One large energy supplier after another has hiked up the prices of already expensive default tariffs – putting huge additional pressure on people who are struggling to meet everyday costs.
“It is the poorest pensioners and families on standard variable tariffs who can least afford these price rises – and they continue to lose out whilst debate about how to cap costs continues.”
There are currently 8.6 million SVT customers who have not switched supplier in the last three years.
Citizens Advice has released analysis showing that the average dual fuel energy bill for SVT customers supplied by the big six has risen by £89 over the last year. That equates to an 8.3 per cent increase – or three times the rate of inflation over the same period (2.6 per cent).
Previous research by the organisation found that poorer pensioners, the disabled and low-income families are the worst affected by price rises as they spend a much greater proportion of their income on gas and electricity – 11.1 per cent compared to 5.2 per cent among all households.
The charity said the top priority for energy market regulator Ofgem should therefore be introducing a price cap for the 2.6 million customers who are eligible for the Warm Home Discount.
“But energy firms can’t be let off the hook from helping all loyal customers,” added MacGregor.
“Suppliers should be set annual targets for getting their customers off default tariffs, backed up with a hard deadline, so that by 2020 anyone who has been on the same rolling tariff for three years would be protected by the cap too.”
The call comes shortly after nearly a third of MPs signed a letter urging prime minister Theresa May to follow through on her general election pledge to introduce a price cap for SVT customers.
The letter, which was also addressed to business and energy secretary Greg Clark, petitioned for Ofgem’s proposed price cap for 2 million vulnerable households to be extended to cover all 17 million customers on SVTs. The signatories included 76 Conservative and 83 Labour MPs.
Speaking at a fringe event at the Conservative party conference on today (2 October), the Clark expressed hopes that the “end of the road” is nearing for SVTs and warned Ofgem that it will have to respond more rapidly to changes in the market in future.
Last month Eon UK became the first big six supplier to ditch its SVT, with chief executive Michael Lewis declaring that “standard variable tariffs have had their day”.