Looking after your cash more like

Here at the Big Deal we’ve long been critical of standard variable tariffs (SVTs) as many of our loyal members will already know!

SVTs are the tariff you roll on to with your supplier after your current deal ends. If you’re with the Big Six energy suppliers they’re the most expensive and worst value for money. [1] This is the way that big energy companies make their cash; they lure in new customers with snazzy prices, then they whack you on to a tariff hundreds of pounds more expensive [2].

British Gas boss Iain Conn came out yesterday saying he’s scrapping SVTs for new customers.  Good news? We’re not so sure.

Here’s why we’re suspicious of whether it’ll be customers who’ll be feeling the benefits of this SVT ditch…

The five million elephants in the room

The main benefit being trumpeted about by Conn is that from April of next year, new British Gas customers won’t get rolled on to SVTs. But it’s not new customers who are the urgent concern! What happens to the five million British Gas customers – 69% of all its customers – who are on their appalling value standard tariff? [3]

 

Opt-out is a cop-out

British Gas said it would also do more to persuade its customers currently on SVTs to move to cheaper deals.

But instead of just getting them cheaper deals automatically, customers have to be the ones to opt out, meaning if they don’t they could still be locked into a rip-off SVT.

But considering the fact that over three million people have been with British Gas over three years and haven’t switched, why on earth would they suddenly jump at the chance now?

Proof is in the pudding… British Gas contacted their customers early on in 2017, to try to persuade them to move on to cheaper deals. Only 10% moved. [4]

Fixed schmixed – it’s still not a good deal

Just because it’s a fixed price doesn’t make it a good deal. The most expensive current fixed rate British Gas was offering was THE SAME as its SVT average.

SVT Price   Fixed Tariff Price   Name of Tariff Fixed Term Length
British Gas £1,101 £1,101 Home Energy Capped Nov 2018 Fixed until November 2018
SSE £1,110 £1,108 Fix 2020 36 month fix
Eon £1,124 £1,124 Fixed 2 Year v11 24 month fix
Scottish Power £1,147 £1,159 Fixed Price Energy October 2019  Fixed until October 2019
Npower £1,166 £1,076 Super Fix March 2021 Fixed until March 2021
EDF £1,142 £1,124 Connect+Control 2 Feb20 Fixed until February 2020

 

Calling it a fixed deal gives the illusion that you’ll be saving money, when actually it’s no better than the standard variable!

Our pals at Octopus Energy, who we recently did an energy deal with, summed it up nicely when they said it was a ‘ruse’ by bringing in a ‘complex array of high fixed tariffs’.

Price cap dodging alert

Iain Conn’s made out that this SVT cap has nothing to do with the government’s energy price cap plans, which Theresa May promised last month.

But in our view this is definitely a dodge tactic for the protection the price cap would bring to customers and British Gas’ way of funnelling it’s customers on to equally poor deals – just under a different name.

Their new tariff is even called Home Energy ‘Capped’ for heaven’s sake! As if this move has got nothing to do with the price cap…

Don’t be fooled. This announcement by British Gas is dodgy on all fronts. A price cap is still the way to clamp down on Big Six exploitation and protect the most vulnerable of customers.

Simply rebranding a rip-off deal isn’t going to cut it. It serves as another way to lull customers into a false sense of security when they could be getting a much better deal if they switch.

[1] https://blog.thebigdeal.com/8-million-households-worst-energy-tariffs/?source=blog&post=8million

[2] https://www.ofgem.gov.uk/publications-and-updates/standard-variable-tariff-comparison-28-november-2016

[3] https://www.ofgem.gov.uk/publications-and-updates/standard-variable-tariff-comparison-28-november-2016

[4] http://www.bbc.co.uk/news/business-42049562


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