Claims That Tariff Reforms Will Push Energy Bills Higher

Published on in Banking News by

The proposals from the industry regulator Ofgem to reform the confusing array of different tariffs on offer from energy supply companies may end up costing consumers money, according to new research by the consumer group Which?

energy billsMore than £55 million could be added to the UK’s domestic energy bills and end up causing even more confusion by offering more than 1,000 price permutations, it is claimed.

Co-op Energy, one of the biggest independent energy providers, has also raised concerns that the market will have too many options when it comes to choosing a tariff and higher rather than lower prices for consumers will be the outcome.

With more than 100,000 customers Co-op Energy is the biggest of the independent operators in the UK’s energy marketplace and the company has expressed fears that each of the 16 suppliers will be able to offer at least 72 tariff options under the new proposals.

This would mean that the public would be confronted with more than 1,000 different pricing packages.

Co-op Energy business development manager Nigel Mason asked consumers to take to Twitter to let Ofgem know about the concerns.

“Far from simplifying the market for consumers, these final proposals go as far as to enshrine the current complexity in a new rule book,” he said.

A Co-op Energy survey of over 1,800 consumers found on average they underestimated their energy bills by £334. Of these, 40% thought that they were already on the cheapest tariff but studies in fact showed that more than 80% could save money by changing.

Which? said that the new tariffs were “far too complicated and will fail to achieve their aim” and that only 10% were able to select the cheapest deal from a range of options.

Ofgem is under pressure from the Government to try and deal with the ever increasing prices of domestic energy supplies, with gas and electricity bills now making up a bigger proportion of the average household’s expenditure than ever.

With so many different offerings in every section of the market, it is crucial to compare energy providers, bank accounts and credit cards in order to find the best fit for you.

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