More than half (56 per cent) of UK consumers do not know that they will automatically be moved onto a standard-variable tariff (SVT) after their fixed deal expires, according to new figures.
Research published by the price comparison website Compare The Market claims 15 million homes may be unwittingly struck with price rises when their current deal ends.
According to the website, around one in five people surveyed did not know the difference between SVTs and fixed-deal tariffs.
Of those who have chosen a fixed tariff for a better deal, 41 per cent do not actually know when it expires, meaning they are not prepared to take action before they are moved on to a SVT.
Almost one in five (19 per cent) of households could not say whether they were still on a fixed tariff or had already been transferred to an SVT, while 12 per cent had no notion at all of what tariff they were on.
The start of April saw Ofgem’s new price cap come into effect, an increase of £117 to £1,254.
Peter Earl, head of energy at comparethemarket.com, said: “This research highlights one of the fundamental issues with the energy market – a large proportion of the UK don’t understand what tariff they are on and how much they should be paying for it. Many people who don’t understand energy tariffs are unfortunately unaware of the consequences of not knowing.
“Even if you are one of the growing group of energy shoppers looking to save money on their energy bills, you may fall into the trap of forgetting when your fixed deal comes to an end. The energy price cap has done little to help those people that forget to switch, with the revised cap having come into force in April, those people already on a SVT or about to be moved onto one are likely to receive a significantly higher energy bill going forward.
“Energy companies need to do more to communicate in a clear and simple way to their customers when their tariff is due to expire and that switching to a new tariff or supplier might deliver savings. The result of not doing this is that millions end up lapsing onto poor value standard variable tariffs to the benefit of energy companies and detriment to people’s wallets. Ofgem has introduced new principles around customer communications, instructing energy companies to make it clear to households when their tariff is due to expire. We hope that Ofgem will police these new regulations rigorously and we are calling on the energy industry to explain as clearly and prominently as possible when tariffs are due to expire via a trigger notification, which should give people time to shop around for the best deal on the market.”
An Energy UK spokesperson commented: “Customers coming towards the end of a fixed-term deal will be notified by their energy supplier and about which tariff they will be moved onto if they take no action. At that point they can also choose a new tariff or alternatively switch to another energy supplier.
“Whilst switching continues to increase every year along with a consistent fall in the number of customers on SVTs, suppliers continue to work to increase engagement amongst all their customers.
“Information about your tariff and options can always be found on your energy bill or by contacting your supplier directly.”