Big energy companies are facing a regulatory crackdown after Dermot Nolan, the Ofgem chief executive said companies had failed to act quickly enough and should move faster to take customers off standard variable tariffs.
A standard variable tariff (SVT) is a supply contract with an indefinite length that does not have a fixed-term applying to the terms and conditions. It’s an energy supplier’s basic offer. If a customer does not choose a specific energy plan, for example after their fixed tariff ends, they are moved to an SVT until they choose a new one.
Nolan said that while two million fewer customers were on standard variable tariffs than a year ago, the market was still not working as well as it should. In fact, Ofgem estimates about two-thirds of households are still affected by these worst-value tariffs.
This represents a huge body of work for the sector. Investigating whether the communications from utilities providers had been effective in informing people of the need to move away from SVTs, Wiraya’s recent study of 2,000 UK based residents revealed just 17% are actually aware they are affected.
As the country heads into another cold winter with expensive tariffs in place and price caps yet to take effect, vulnerable age groups both young and old are preparing to layer up rather than turn the heating on.