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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 regulators
(35 minutes 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. A claim that charity Age UK has been promoting unfavourable gas and electricity deals in return for cash is to be examined by two regulators.
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 said 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. The energy regulator Ofgem and the Charities Commission are to examine the deals.
Age UK has rejected the allegations, while E.On said its tariffs were competitively priced. Age UK rejected the allegations, while E.On said its tariffs were competitive.
The Charity Commission, which regulates charities, said it too would examine Age UK's relationship with the energy provider. In return for selling its energy deals, the Sun alleged that Age UK had received about £6m from E.On.
'Generous''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 that Age UK received about £41 from energy supplier E.On for every person signed up.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.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. But the charity said the commission was typically only £10 per customer.
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". "We strongly reject the allegations and interpretation of figures," said a spokesperson for Age UK.
Switching optionSwitching option
The charity added it had been working "openly and above board" with E.On for 14 years. The charity said its two year fixed tariff was the cheapest deal on offer when it launched in January. It said customers were free to choose the one-year option, but many preferred the reassurance of a two-year tariff.
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."
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.
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. The Age UK two year tariff has no exit fees. According to E.On's website, this deal should currently cost an average user £948 a year.
E.On's one year fixed tariff, which has a £60 exit fee, should cost £772 - £176 cheaper.E.On's one year fixed tariff, which has a £60 exit fee, should cost £772 - £176 cheaper.
'Rough deal'
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."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."
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.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.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.
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