Energy firms 'keep best rates hidden'

UK energy firms are keeping their most competitive tariffs hidden and not telling customers how they could be saving, claims a new report.

A study by moneysupermarket.com reveals a standard tariff customer is paying £149.94 on average more by not switching to an energy supplier's best rates.

However, 16.8 million homes are still paying the higher standard rates – as energy firms are not promoting the better offers to them.

"Energy providers rarely, if ever, tell existing consumers about cheaper options, as the more expensive tariffs allow them to offset the great deals they offer," said Paul Schofield, head of utilities at moneysupermarket.

"Allowing existing customers to languish on old tariffs is a money spinner, but it doesn't help build trust or loyalty."

It is estimated the six largest gas and electricity providers earn over £2.5 billion a year from customers sticking to higher rates.

There are now calls for energy firms to be subject to rules akin to those adopted by the banking industry forcing them to tell customers about better products.

"The need for a banking-style code is obvious with our research finding over 60 per cent of Brits oblivious to whether or not they are on the cheapest deal with their energy provider," said Mr Schofield.

"There are clear savings to be made by checking if your provider has a cheaper deal, and swapping to it."

However, British Gas has defended its position saying its best tariff, Click Energy, is well publicised.

"Click has been on the front of our homepage – and as this gets millions of hits each year it’s hardly hidden," said Alan McLaughlin at British Gas.

"It's been advertised online for the last two years across many websites – as it’s an online tariff this makes sense. We’ve done rate alerts with moneysupermarket and other switch sites to directly hit their customers – and unlike our competitors we don’t try and stop current customers switching to our cheapest deal."

He went on to call the moneysupermarket research "a cheap PR shot".

"They are talking nonsense," Mr McLaughlin said.

According to the moneysupermarket data, the greatest savings are available for Scottish Power, whose best tariff is £188.59 above its standard tariff.

Meanwhile, savings are also available at British Gas (£170.34), Powergen (£144.65) and npower (£141.59).

Overall the figures show Scottish Power has the cheapest standard charge at £958.64, while British Gas's best tariff is cheapest at £742.22.