Older consumers feel in the dark on energy changes
Published on 10 December 2013 02:30 PM
10.3 million older consumers feel in the dark on energy market changes
- More than two thirds (71%) of over 60s are unaware of the impact new government measures will have on their energy bills
- 57% unsure whether government measures will assist in making energy easier to understand
Energy customers feel in the dark about the imminent changes in their tariffs which will come into force when the Retail Market Review (RMR) is rolled out next year. Research* into energy consumers aged over 60 carried out by Age UK Enterprises, the social enterprise arm of the charity, shows that 71% are unaware of the impact new measures will have on their bills.
The core objective of the upcoming government changes is to make the energy market simpler for consumers, yet more than half (57%) of older people surveyed remain unsure whether the RMR will assist their understanding of the energy market, and less than one percent (0.6%) stated that they believe changes will bring a greater trust in providers.
Although all energy suppliers are obliged to introduce four new ‘core' tariffs per payment method by 31 December this year, less than a fifth (19%) of over 60s surveyed report having heard of upcoming changes.
Overwhelmingly those polled place the duty to inform with their energy provider, over two thirds (73%) believing this to be the case. Of those who were aware of RMR, the vast majority (65%) have so far found out via the media or consumer groups.
Worse, 40% of those surveyed do not realise that the onus is placed on the consumer to take action when these measures come into effect; otherwise it is likely that they will be placed on a standard tariff which may not be the best-priced product for their needs.
Gordon Morris, Managing Director of Age UK Enterprises, said:
'This is the single biggest change in the sector since privatisation and clearly there is more work to be done to ensure older consumers are made aware of what is coming.
'There are currently 14.5 million people** aged 60 and over in the UK, more than 62% of whom have never switched their energy provider***. It is consumers like this that we need to make sure are aware of these changes and are helped to act.
'Energy providers have a big job ahead of them, and all those of us involved in the industry must work hard to ensure that customers know exactly what that Retail Market Review means for their tariff.'
Putting even more emphasis on the importance of better informing the older consumer, it is heartening that this research suggests over four fifths (81%) of older energy customers will actively respond to the implementation of RMR, either by researching options, changing their tariff, or seeking additional advice or assistance.
Gordon Morris further commented:
'The objective of the Retail Market Review is to simplify the energy tariffs on offer to consumers, yet many remain unsure of how it might benefit them. At Age UK we have long championed savvy consumers and empowering older people on their financial matters.
It is heartening that older energy customers will actively respond to changes and shop around when new tariffs are introduced, but it is important that they have all the information they need to do so. Strong support is essential, and we hope the tariffs on offer give older consumers products which cater to their specialist needs.'
Age UK Enterprises and its energy product provider E.ON are communicating with their customers to tell them about these changes regarding the Age UK Energy tariff**** and the importance of proactively checking with their energy provider to ensure that they are on the best deal.
Age UK has also published guidance on the Retail Market Review as part of its ‘Spread the Warmth' campaign to help older people respond.
Download the press release: 10.3 million older consumers feel in the dark on energy market changes (PDF 174kb)
For additional information please contact Rachel Finlay or Donna McGrory by emailing firstname.lastname@example.org or calling 0207 360 7877
* Consumer research of the over 60s and their understanding of the Retail Market Review on energy company price tariffs and how it might affect them. Poll ran from the 14th to 19th November 2013 to a contact sample of 4,000 adults over the age of 60.
*For each question respondents were presented with a range of answers to choose from.
** Source: \Mid-2012 Population Estimates UK Office for National Statistics, 2013
*** Ofgem / ipsos Mori research June 2013
**** E.ON has worked with Age UK since 1990 to help improve the lives of people in later life.
Age UK Enterprises, the social enterprise arm of the Charity, provides a tailored Energy product for those in later life developed with E.ON.
Designed to meet the needs of those in later life, the Age UK Energy fixed rate tariff has no exit charges and offers visibility and peace of mind on what is to be paid for a twelve month period currently.