The energy regulator Ofgem reports they are preparing to get rid of their disputed method of savings calculating.
Such a decision was made under the pressure of Times Money that was running an anti “personal projection” calculation campaign to end up artificial saving inflation. The savings were increased by switching the supplier of energy, and sometimes the number reached hundreds of pounds annually.
The decision of the Ofgem authorities was also reasoned by the Competition and Markets Authority (CMA) report that indicated the overcharges the energy suppliers did. The so-called Big Six has charged about £1.7 billion a year from 2012 to 2015 from their clients. The report also stated that about 66% of customers are still on the overcharged tariff.
Joe Malinowski, of theenergyshop.com, the only switching website that refused to adopt the personal projection approach for calculating savings, says: “Over the past two years we estimate that more than one million people have been misled by unrealistic and inflated calculations displayed on comparison websites. Some customers could have switched supplier when the real benefit was small or non-existent.” So how did the system work and hy was it flawed?
The personal projection
Before the system changed in 2014, you could go on to a comparison site, enter the details of your past 12 months’ energy spend and see if better deals were available. If your existing energy spend was £900 a year and you found a deal charging £800 for the same consumption, it seemed you had a saving of £100.