Staggering £3.8 billion* lost in energy bills, warn finance experts
By TotallyMoneyFeb 5th 2020
Finance experts TotallyMoney have warned that 27 million UK households are potentially missing out on substantial £300 savings due to price hikes and widespread misconceptions. Research reveals:
- A significant £300† a year could be saved on average in UK households by switching energy tariff
- This equates to customers overpaying by £3.8 billion due to not switching energy tariff or supplier
- A massive 82% of the British public failed to switch energy in 2018‡
- Over half (58%) falsely believe they are already on the best tariff‡
TotallyMoney’s award-winning free credit report has always shown customers how much their money habits affect their credit score. Their brand-new energy switching service helps customers to improve their spending habits, and means they will now see their best money-saving options to ensure they never pay more than they need to.
The launch comes at a pivotal time for customers, many of whom resolve to take control of their finances at the beginning of the year but remain unaware of how significant an impact energy switching has on their financial welfare.
Shockingly, nearly three in five (58%) believe they are already on the best energy tariff. However, many don’t know that some energy suppliers automatically place customers on the most expensive plan once their introductory period ends, which is only capped due to restrictions and regulations mandated by the government.
The lightbulb moment
TotallyMoney customers now get a constantly up-to-date view on how much they can save on their energy bills and can complete a money-saving switch in as little as two minutes. This hassle-free experience will overcome significant barriers for customers, with one in four (25%)‡ believing energy switching to be an inconvenience and are left out of pocket as a result.
Customers can also choose how they save based on what matters to them most, whether that’s price alone, well-established energy providers, contract flexibility, or green suppliers.
Alastair Douglas, CEO of TotallyMoney, comments:
“We’re excited to launch energy switching for our customers and are keen to get the word out about how significant the potential savings are.
“It’s alarming that £3.8 billion of people’s hard-earned money is being lost due to not switching.
“A £300 annual saving is a worthwhile return in exchange for just two minutes of someone’s time — and that’s just the tip of the iceberg. For larger households and families, the potential savings could be even greater.
“At TotallyMoney, we’re on a mission to improve the UK’s credit score and help our customers move on up to a better financial future. Helping our customers save money on their energy bills is a significant step forward in achieving this goal. Whether those savings are used to pay off more of their debt, or to simply make day-to-day living a little bit easier, it’s clear to see how a small switch could make such a big difference to the lives of many across the UK.”
There are 27 million households in the UK (ONS). Of these households, 51% are on an SVT, and 4.3 million of these are on a prepayment meter (Ofgem*).
The average difference between an SVT and a default tariff is £304, whilst the difference between an SVT and a prepayment meter is £167 (Ofgem*).
4,300,000 (prepayment)*£167 (prepayment saving)*51% (percent on default tariff) = £366,231,0004,300,000 (prepayment)*£167 (prepayment saving)*51% (percent on default tariff) = £366,231,000
22,700,000 (households)*£304 (SVT-default tariff saving)*51% (percent on a default tariff) = £3,519,408,000
Total = £3,885,639,000
‡Consumer Engagement in the Energy Market 2018 Report (Ofgem)
For more information, please contact the press team
TotallyMoney believes people’s financial data should work for them, and not against them and with more than four million customers, they provide the UK’s only free, live credit score and report.
Its service helps customers understand their financial position and provides personalised recommendations so they can start creating financial momentum. TotallyMoney also works closely with leading lenders, to ensure eligible customers are matched with the right products, underpinned by its robust data, product and tech capabilities.
TotallyMoney is regulated by the Financial Conduct Authority (FCA).