Age UK suspends controversial energy tariff with E.ON

The charity for older people has been criticised in the media for the arrangement, which The Sun claimed was more expensive than the energy provider's cheapest rate

Energy: tariff withdrawn
Energy: tariff withdrawn

Age UK has suspended its energy tariff with the provider E.ON after the deal was criticised in the media.

The charity was the subject of a front-page story in The Sun newspaper last week, which claimed that Age UK was earning £6m a year from selling a two-year, fixed-rate promotional tariff with E.ON to older people.

It also claimed that the tariff would result in pensioners typically paying £1,049 a year, £245 more than the firm’s cheapest rate for 2015.

Age UK strongly defended its position and rejected the newspaper’s interpretation of the figures.

The energy regulator Ofgem has been asked to look into the allegations by Amber Rudd, the energy secretary. The Charity Commission and the Fundraising Standards Board also said they would contact the charity in connection with the matter.

In a statement released yesterday afternoon, Age UK Enterprises, the charity’s trading arm, said that it was suspending the two-year, fixed-rate energy tariff with E.ON to new and renewing customers from today.

It said that discussions with E.ON over the best way forward were continuing.

Ian Foy, managing director of Age UK Trading, said in a statement: "We always aim to give our customers outstanding value for money. This decision, prompted by the planned tariff changes, will give us the opportunity to review the current situation."

The charity’s statement said that when it launched its fixed two-year tariff with E.ON in December 2013 it "was the leading nationally available tariff of its kind".

It said: "It offered significant savings compared with other fixed two-year tariffs as well as the standard variable tariffs which the majority of energy customers are on.

"In a volatile energy market, it came with the reassurance of being fixed for longer than one-year tariffs and also benefited from no cancellation fees, allowing customers to change without penalty at any time."

It said that customers on existing Age UK Enterprise tariffs would be unaffected by the move.

A statement from E.ON said: "This decision has been reached on a mutual basis and both organisations retain confidence in the tariff offered to customers. 

"However, due to continued speculation regarding the partnership, both organisations feel it is right to pause and reflect on the best way for both parties to achieve their shared goal of helping customers."

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