The cost of energy is at an all-time high, and it will continue to rise into the future. Meanwhile, taking into account trading markets the price of food and consumables will increase over the next few years and many households are going to find this a struggle too far. In lieu of this, the Competition and Markets Authority (CMA) is to call for energy price controls in its latest report on the energy sector due to be published next week, focusing on areas where prices could be constrained.
Pre-payment meters could be scrapped
Many believe that the CMA will call for an end to pre-payment meters, or at least a revision of them, to make them no more expensive than regular energy tariffs that are paid by Direct Debit – at the moment, pre-payment meters work out more expensive than Direct Debit tariffs. Yet few consumers know this, and some consumers have no option but to opt for pre-payment. Pre-payment meters are used by an estimated six million households in the United Kingdom and they are increasingly popular due to the additional management they offer.
A default tariff may be proposed
In addition, the CMA may well call for a default tariff, which comes into play when consumers don’t switch. Such a tariff would be linked to the wholesale price of energy.
Elsewhere, new research conducted by price comparison websites suggests that the savings made by consumers who have switched their energy tariff has risen to more than 40% for the first time, which is a huge win for consumers. However, research conducted by Ofgem in 2014 with regard to SMEs found that 40% of SMEs have not switched their energy deal for over 5 years, due to either retention, auto-renewal or them believing they are getting a fair energy deal. As always, the message from consumer groups and groups supporting business in the UK is to shop around for the best energy deals when it comes time to renewing. It simply isn’t worth paying more when you don’t have to.