Millions will get lower energy bills by automatically switching to cheaper tariffs
MILLIONS of Brits will be switched to cheaper energy tariffs automatically, saving them hundreds of pounds a year on bills.
Under new proposals set out by the government today, households would be moved on to a better deal without having to switch energy companies themselves.
Automatic switching would help those on pricier default tariffs avoid paying more than they need to for their energy bills.
Less than half of billpayers shop around for a better deal, according to the energy regulator Ofgem.
Now the government has published plans, first revealed by The Sun last month, to tackle the so-called loyalty penalty, with a trial of automatic switching set to take place in 2024.
Energy customers will be moved to a cheaper tariff unless they decide to opt out, the proposals say.
How to save on your energy bills
SWITCHING energy providers can sound like a hassle - but fortunately it's pretty straight forward to change supplier - and save lots of cash.
Shop around - If you're on an SVT deal you are likely throwing away around £300 a year. Use a comparion site such as MoneySuperMarket.com, uSwitch or EnergyHelpline.com to see what deals are available to you.
The cheapest deals are usually found online and are fixed deals - meaning you'll pay a fixed amount usually for 12 months.
Switch - When you've found one, all you have to do is contact the new supplier.
It helps to have the following information - which you can find on your bill - to hand to give the new supplier.
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you pay
- An up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won't be interrupted in that time.
A new 'opt out' system would effectively kill the 'standard variable tariff' and slash bills for millions of loyal customers who can't or don't switch.
Kwasi Kwarteng the business and energy secretary, said: "We want to unleash a wave of competition within the energy market and keep energy bills low so households across the UK can keep more money in their back pockets."
"Although more of us are now shopping around for the cheapest tariffs, the existence of better deals on the market is not sufficient in itself to drive consumer behaviour.
"That’s why we will make the switching process even easier so we can tackle the ‘loyalty penalty’ and ensure everyone pays a fair price for powering their homes."
The government will consult on how an automatic switching scheme will work.
It will build on previous trial by Ofgem that found customers were between five and 10 times more likely to switch when shown their options via email or letter.
Tom Lyon, director at energyhelpline, welcomed the move and said a widespread rollout of auto-switching "will empower customers to drive down the cost of their bills".
The Warm Home Discount Scheme which gives vulnerable Brits including pensioners money off their energy bill will also be extended.
The amount will rise from £140 to £150 and it will run until 2026.
There are also plans to extend the energy price cap which limits the amount energy companies can charge for the average bill beyond 2023.
It was last extended at the end of last year until the end of 2021 and was first introduced in 2019.
The cap set by energy regulator Ofgem and is currently £1,138 per year on average for dual fuel direct debit customers.
The limit stops bills of anyone who hasn't shopped around for the best deal from rocketing - but energy customers could still save hundreds of pounds extra a year by switching to a cheaper deal.
Martin Lewis has urged households to switch energy bills NOW as wholesale prices hit three-year high.
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