- Tenants who directly pay for their energy have the right to switch supplier.
- 77% of bill payers living in rented accommodation say they have never switched their energy supplier.
- Tenants who have never switched could save an average of £190 by switching.
Ofgem has today published guidance for tenants setting out their energy rights. The publication of this accessible information is part of Ofgem’s wider work to empower consumers and to deliver a simpler, clearer and fairer energy market.
Ofgem’s 2013 customer engagement survey shows that only 23% of consumers living in rented accommodation say they have ever switched their gas or electricity supplier. Many tenants may not know their rights or the potential gains that could come from switching suppliers. Today’s guidance for tenants is intended to help bust myths and break down information barriers that might be a contributing factor to the low switching rate.
The key energy right is that where a tenant is directly responsible for paying the energy bill they have the right to choose their own energy supplier. The landlord or letting agent should not prevent this.
In some circumstances, a landlord or letting agent may include a default supplier within their tenancy agreement. If this is the case, the landlord or letting agent should make tenants aware of any tie-ins with specific suppliers. Our guidance makes clear that as long as you are directly responsible for paying the energy bill then you have the right to switch supplier at any time without incurring an exit fee if you were not informed upfront of the terms and conditions.
In addition to guidance on rights, Ofgem also gives top tips for tenants. These include making sure you look out for any clauses in your tenancy agreement relating to energy suppliers, informing your landlord or letting agent after you switch supplier and to take meter readings when you move into a property and also when you move out.
Philip Cullum, Ofgem’s Partner, Consumer Policy and Demand Side Insight said: “At a time when 9 million British households are renting and budgets are tight, it is important that consumers are clear about where they stand when choosing and switching their energy supplier. Our research shows that tenants that have not switched could save an average of around £190 on their annual energy bill. Ofgem’s clear guide and top tips are intended to empower consumers when navigating the energy market and help them to find their best energy deal. It is all part of Ofgem’s work to make the market simpler, clearer and fairer for consumers.”
Today’s guidance for tenants follows Ofgem’s work on wide-ranging reforms to simplify the energy market. These include enforceable standards of conduct that came into force in August, which compel suppliers to treat their customers fairly. The main reforms to tariffs, which include limiting the number of tariffs that suppliers can offer to four per fuel, will be in place by the end of the year.
Carolyn Uphill, Chairman of the National Landlords Association, says:
“As energy prices rise, it’s essential that bill payers get the best value for money and when looking to rent a new property, tenants should consider the total cost of living in the property, including the bills, rather than the rent alone.
“We encourage tenants to shop around for the best deal and switch to a new, more competitively priced supplier. However, as a courtesy, we advise tenants to inform their landlord if they plan to change energy supplier and ask permission to add new wiring or equipment if this is required.”
Notes to editors
- Ofgem’s 2013 customer engagement tracking survey (conducted by Ipsos MORI in the period 1-14 March 2013 among 1,433 energy consumers) showed that 38% of all gas customers said they have ever switched their gas supplier. However only 23% of those in rented accommodation say they have ever switched their gas supplier. This compares to 42% of those who are not in rented accommodation. The figures are the same for electricity, although 43% of those not in rented accommodation say they have ever switched electricity supplier.
According to the 2011 census figures for England and Wales there were 23.4 million homes in England and Wales on census day in March 2011. 8.3 million (36 per cent) were renting, either privately from a landlord (4.2 million) or social housing (4.1 million).
Results from the Scottish Household Survey 2011 show that 34% of Scottish households were rented in 2011 (23 per cent social rented and 11 per cent private rented).When applied to 2011 Scottish census data this suggests approximately 800,000 of Scotland’s 2.4 million households are renting.
- Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's functions are set out mainly in the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998 and the Utilities Act 2000. In this note, the functions of the Authority under all the relevant Acts are, for simplicity, described as the functions of Ofgem.
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