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Age UK energy deals with E.On to be examined by Ofgem Age UK energy deals with E.On to be examined by Ofgem
(about 3 hours later)
Energy industry regulator Ofgem is to examine a claim that charity Age UK has been promoting unfavourable gas and electricity deals in return for cash.Energy industry regulator Ofgem is to examine a claim that charity Age UK has been promoting unfavourable gas and electricity deals in return for cash.
The Sun newspaper claims energy deals offered by Age UK with supplier E.On may have been much more expensive than the cheapest offers from the firm.The Sun newspaper claims energy deals offered by Age UK with supplier E.On may have been much more expensive than the cheapest offers from the firm.
In return, the Sun alleged, the charity had received about £6m from E.On.In return, the Sun alleged, the charity had received about £6m from E.On.
Age UK has rejected the allegations, while E.On said its tariffs were competitively priced.Age UK has rejected the allegations, while E.On said its tariffs were competitively priced.
The Charity Commission, which regulates charities, said it too would examine Age UK's relationship with the energy provider.
'Generous'
The Sun claimed that Age UK recommended a special rate from E.On which would typically cost pensioners £1,049 for the year - £245 more than its cheapest rate in 2015.The Sun claimed that Age UK recommended a special rate from E.On which would typically cost pensioners £1,049 for the year - £245 more than its cheapest rate in 2015.
It also alleged Age UK received about £41 from energy supplier E.On for every person signed up, amounting to £6m a year. It also alleged that Age UK received about £41 from energy supplier E.On for every person signed up.
Age UK's accounts indeed show that it received £6.3m in income from energy deals in the year to April 2015.
BBC personal finance correspondent Simon Gompertz said it was standard practice for price comparison websites to receive a commission for passing on business.BBC personal finance correspondent Simon Gompertz said it was standard practice for price comparison websites to receive a commission for passing on business.
Age UK would not comment on any payments it had received from E.On. But it said E.On "have been generous supporters of our charity over and above the number of customers on the tariff".Age UK would not comment on any payments it had received from E.On. But it said E.On "have been generous supporters of our charity over and above the number of customers on the tariff".
Switching optionSwitching option
The charity added it had been working "openly and above board" with E.On for 14 years.The charity added it had been working "openly and above board" with E.On for 14 years.
A spokesman said: "We strongly reject the allegations and interpretation of figures in this article.A spokesman said: "We strongly reject the allegations and interpretation of figures in this article.
"Energy prices change all the time and we have always advised older people to look out for new good deals and we will continue to do so.""Energy prices change all the time and we have always advised older people to look out for new good deals and we will continue to do so."
E.On said the Sun had made a comparison between two different types of tariffs.E.On said the Sun had made a comparison between two different types of tariffs.
It said the Age UK product referenced by the paper as costing pensioners about £1,049 annually was a two-year fixed deal which, although more expensive than its cheapest rate, was favoured by some customers because it provided longer-term certainty over potential price increases. The Age UK deal was a two year fixed tariff, with no exit fees. According to its website, this deal should currently cost an average user £948 a year.
E.On said: "We always work to make sure our tariffs, for all customers, are competitively priced and that is further evidenced by the fact that our current Age UK tariff was the UK's cheapest product of its type in the UK when it was launched, a two-year fixed deal, and when we launched our current one-year fixed product, it was also the cheapest in the UK." E.On's one year fixed tariff, which has a £60 exit fee, should cost £772 - £176 cheaper.
It added its customers could switch tariffs at any time without any charge being applied and sign up to be alerted to potentially better deals when they became available. E.On said: "Our current Age UK tariff was the UK's cheapest product of its type in the UK when it was launched, a two-year fixed deal, and when we launched our current one-year fixed product, it was also the cheapest in the UK."
In a statement, Energy Secretary Amber Rudd said: "People expect a fair deal when it comes to their energy bills, not a rough deal. It added its customers could switch tariffs at any time without any charge being applied, and they could sign up to be alerted to potentially better deals when they became available.
Energy Secretary Amber Rudd said: "People expect a fair deal when it comes to their energy bills, not a rough deal.
"I take very seriously this allegation that Britain's pensioners are being misled, so immediately contacted Ofgem who will now investigate this urgently and report back to me.""I take very seriously this allegation that Britain's pensioners are being misled, so immediately contacted Ofgem who will now investigate this urgently and report back to me."
Ofgem said its rules required energy companies to treat consumers fairly when they were marketing and selling energy.Ofgem said its rules required energy companies to treat consumers fairly when they were marketing and selling energy.
It said: "Ofgem has a track record of punishing firms who mislead consumers and we will look at carefully at these claims."
Under scrutiny
Last month, E.On announced a 5.1% reduction in its standard gas price for residential customers.
At the time, it said it had Britain's cheapest fixed energy tariff.
Energy firms have been cutting prices recently in response to the falling prices of wholesale energy.
However, critics say that they have not been quick enough to pass those falls on to consumers.
The Competition and Market Authority (CMA) is still examining whether the industry needs reforming to improve competition between suppliers.
Did you decide to get your energy supplied through E.On after reading advice from Age UK?Did you decide to get your energy supplied through E.On after reading advice from Age UK?
Are you a pensioner who has used the charity to get advice about your bills? Please email haveyoursay@bbc.co.uk with your experiences.Are you a pensioner who has used the charity to get advice about your bills? Please email haveyoursay@bbc.co.uk with your experiences.
Or use the form belowOr use the form below