More than four million households don’t know when their fixed energy tariff expires, resulting in a massive £1.4billion in potential overpayments, data has revealed.
One in ten homeowners also don’t know whether they are on a fixed or standard variable tariff, the study by Compare the Market shows.
With so many different energy deals available on the market, many households are struggling to differentiate between the various types of tariffs that are available, the comparison website says.
Over four million households across the UK don’t know when their fixed energy tariff expires
The confusion means some are ignoring the problem altogether, with 12 per cent of people admitting to rarely, or never, reading their energy bills.
The research also discovered that of the 14million UK households that are currently on a fixed energy tariff, 33 per cent admit they are unaware of its expiry date – which equates to more than four million households nationwide.
Not reading the energy bill means households may miss out on this information, as well as other important details, including if they have been, or are about to be, rolled onto a less competitive SVT or other default tariff, which could cost them, on average, an extra £300 a year.
This equates to households potentially overpaying by over a whopping £1.4billion across the UK.
It spoke to more than 1,700 home owners, responsible for paying their energy bills, around the country to determine how much – or little – consumers knew about theirs.
A massive 42 per cent also said they don’t read their bills because they pay through direct debit, admitting that automatic bills have prevented them from engaging.
In an attempt to get more consumers to properly check their energy bills, Compare the Market have introduced their EnergyCheck service.
The aim is to make it much easier for customers to decipher their energy bills and stay on the most competitive energy tariff.
13% of those surveyed said they didn’t check their energy bills as they found it depressing
All people need to do is sign up to EnergyCheck once and set their savings preferences, which will then send them regular alerts about potential savings available on the market, including when their fixed deal is about to expire.
Consumers will then be given the choice of whether to switch to an alternative, and potentially cheaper, tariff.
It is advised that customers look for the best possible deal as household energy is likely to increase significantly through the winter months as the temperature drops and the threat remains of the Beast from the East returning.
Those on a fixed tariff have a better chance of avoiding high energy bills, leaving them less concerned about how much heating they are used over the winter months.
By comparison, customers on an SVT are likely to end up paying over the odds for their bills this winter.
A fixed tariff offers set standing charges and unit rates for a designated term, which is usually around a year.
However, on an SVT, customers pay a variable price each month, which will go up or down depending on the movements in the wholesale energy market.
Most new customers are placed on an SVT, unless they specify otherwise. In general, SVTs are the most expensive option of the two.
There are other reasons for customers not engaging with their bills as a further 23 per cent said they don’t read their energy bills because they don’t understand it whilst another 13 per cent said they refuse to read their bills because it depresses them.
Despite this, UK households have also shown a strong desire to seek out better energy deals and save money.
A massive 85 per cent of respondents admitted they would consider switching energy supplies whilst 74 per cent said they already have.
Peter Earl, head of energy at Compare the Market, said: ‘Everybody loves to save money, but when it comes to energy, many people have no idea where to begin.
‘The complexity of the energy market is clearly making households disengage from their bills, and, critically, a lot of people have no idea when their fixed tariff ends or if they have been rolled onto a SVT.
‘This leads to a significant, but totally avoidable, rise in the cost of energy for millions of homes.’