The Department for Work and Pensions slammed for ‘damaging’ tariff switching message

The Department for Work and Pensions has been criticised by MoneySavingExpert for sending messages telling energy customers to switch their tariffs even though such a move could end up costing them hundreds of pounds.

What’s happened?

Better off on current energy tariffs

With wholesale energy prices remaining close to record highs consumers are actually better off sticking with their current deals due to the ‘protection’ being offered by the current energy price cap. A switch now would likely put them onto far more expensive tariffs.

Either way, next year will see energy bills soar and the price cap be hiked in order to cover the massive costs being inflicted upon struggling energy suppliers.

Martin Lewis, founder of MoneySavingExpert.com, said: “We are in an extreme energy bill crisis. The logic of how to manage bills has been turned on its head. There has never been a time when clarity of message and action is more important. That’s why the Government mailing out an incorrect message to millions of people, including many of the nation’s most vulnerable, is too big a risk to take.

“The right move for most people right now is to do nothing – don’t switch. That’s because if you do nothing, you’ll either be on, or automatically moved to your provider’s default standard variable tariff, which is price capped. The price cap forces energy firms to sell energy at below its cost price – there is no meaningfully cheaper option.

“Due to the obvious hit to their finances, many big energy providers are trying to persuade people to move off those tariffs to fixed deals at premiums often far higher than 30%. They are using all the marketing tricks in the book to do it, and playing on the fact that until now that has been the right option.”

In response to the criticism the DWP said: “This is an initiative that has been in place for a number of years to encourage switching and the latest batch of 10 million envelopes was created before the rise in energy prices. The message is simply a suggestion.

“It would’ve been impractical, costly and wasteful to replace the 10 million envelopes with new ones, and crucially it would potentially compromise our ability to make millions of Winter Fuel Payments before Christmas.”

Also read: Ofgem issues a warning to energy suppliers over the use of threatening language towards customers

Further Reading

Utility Warehouse pays £1.5 million to Ofgem for inadequate support of struggling customers

Customers of the six recently failed Energy companies assigned new suppliers

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