Npower and SSE merger could see Brits charged more for energy
A MERGER between energy providers Npower and SSE could lead to higher prices for customers, the UK’s competition watchdog has warned.
The Competition and Markets Authority (CMA) said the deal would face an in-depth probe unless the two firms could address competition concerns.
The new energy company would bring the Big Six down to five and experts are warning that less competition in the market could see the price of energy go up - although we don't know by how much just yet.
It would also create a company with more than 11million customers - the second-biggest UK energy supplier after British Gas, which has more than 14million.
Rachel Merelie, senior director at the CMA, said: “We know that competition in the energy market does not work as well as it might.
"However, competition between energy companies gives them a reason to keep prices down.
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DON'T be put off switching energy suppliers because you can't be bothered as you could be getting a much better deal if you went elsewhere. Here's how to do it:
Shop around - If you're on a standard variable tariff deal you are throwing Away up to £300 a year. Use a comparion site like MoneySuperMarket.com or EnergyHelpline.com to see the best deals that are available to you.
The cheapest deals are usually found online and are fixed deals - meaning you'll pay a fixed amount often for 12 months.
2. Switch - When you've found one, all you have to do is contact the new supplier.
It helps to have the following information - which you can find on your bill - to hand to give the new supplier.
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you pay
- An up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won't be interrupted in that time.
“We have found that the proposed merger between SSE Retail and Npower could reduce this competition, and so lead to higher prices for some customers.
"We therefore believe that this merger warrants further in-depth scrutiny.”
Both firms have until May 3 to address the CMA's concerns, otherwise the merger will have to undergo a second investigation.
SSE said it "remained confident" the tie-up will benefit customers and the energy market as a whole.
Centrica, Iberdrola (ScottishPower), E.On and EDF make up the rest of the Big Six, all of who have also come under pressure from smaller rivals who have been taking customers and market share.
Alex Neill, from consumer group Which?, said the competition authorities are right to warn that this merger of two big energy suppliers "could reduce competition and lead to higher bills."
She added: "Given that both of these energy suppliers also struggle on customer service, coming in the bottom half of our satisfaction survey, it's vital that there is thorough scrutiny of the impact on consumers before allowing any venture to go ahead."
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Richard Neudegg, from , said that competition is "crucial" for delivering cheaper prices for energy customers.
He added: "Whatever decision the CMA reaches it's vital that consumers are put front and centre and that they can access good value deals in this market.
"If this deal does go ahead we'll be watching closely to see if SSE/npower deliver on their promise of better outcomes for consumers."
According to uSwitch, the average tariff from the Big Six is now £326 more expensive than the best deal on the market.
The rip-off is causing such concern that the Government is set to introduce an energy price cap, which will limit the cost of SVTs until at least 2020.
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But Brits are still reluctant to switch - more than nine million households didn't change provider once between 2012 and 2017, costing them more than £1,500 over the five years.
We regularly report on how you can save hundred of pounds a year by switching energy company but people are often put off by the hassle.
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