LONDON, December 18, 2012 /PRNewswire/ --
Business price comparison site PowerExperts.co.uk has warned at least 86% of small to medium UK businesses are being charged on average 30% more than they should be on their energy bills.
Research carried out this year (2012) on behalf of statutory consumer body Consumer Focus shows 48% of polled businesses simply let their energy provider increase their rates by an average 30% without even questioning if they were receiving the most competitive deal on the market.
This common practice by all major UK energy companies is known as "rollover contracts". The higher rates offered will automatically renew for another 12 months if you don't do anything.
While almost half of small to medium enterprises (SMEs) failed to act at all, even more shockingly, 38% directly accepted the higher rollover rates offered - potentially leaving themselves hundreds of pounds out of pocket each year.
Only 14% of businesses declined rollover rates.
James York, a spokesperson for PowerExperts.co.uk, described the figures as "concerning", and urged all UK SMEs to refuse rollover rates and search for a competitive deal.
He said, "Businesses should never accept rollover rates without first investigating what else is available to them.
"The fact that almost half of businesses are failing to act and ending up on more expensive rates is concerning enough, but when you consider that nearly 40% are actively accepting these rates, it's even more troubling - especially when businesses need to conserve as much cash as possible in this economic climate.
"That's a huge percentage of SMEs who are paying far too much for their energy, simply by not shopping around."
Mr York added that while a huge number of businesses have found themselves marooned on rollover rates, the actual number of businesses paying too much for their energy could be even higher.
He explained, "The truth is, the situation could be even worse than it seems because when you consider 14% of businesses rejected the rollover rates, there's a question about what happened to them.
"There's a real danger that a percentage of those companies, having terminated their contract, may have failed to take out a new contract within the period stipulated by their previous supplier. When that happens, the old supplier can implement out-of-contract rates.
"These can be literally up to 300% higher than ordinary rates. That's why it's vital - particularly for SMEs - to be proactive and make sure they have a new deal in place.
"PowerExperts.co.uk can help in that regard. We compare tariffs from all the major suppliers - and several independents - to make sure we offer businesses the cheapest prices we can. When it comes to renewing, that's crucial, otherwise, there's a real danger companies could end up paying more than they need to."
Properly obtained SME contract prices are always lower than rollover rates. If you got caught out last year, PowerExperts.co.uk could save your business up to 70% in today's competitive market.
NOTES FOR EDITORS
PowerExperts.co.uk is an online price comparison site - specifically designed for UK businesses.
More information on rollover contracts and how to avoid them can be found at: http://www.powerexperts.co.uk/business-energy/switch.html
All research contained in this release is taken from "Micro-business energy markets 2012: a review for Consumer Focus".
A micro-business is defined by Consumer Focus as a company that meets at least one of the following criteria:
- Annual electricity demand less than 55,000kWh
- Annual gas demand less than 200,000kWh
- Fewer than 10 employees (or their full-time equivalent) and an annual balance sheet not exceeding €2 million.
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