Energy firm E.ON probed over ‘payments to Age UK’
- Credit: PA
An energy company has paid out £6 million a year to Age UK in return for the charity pushing expensive tariffs to the elderly, it has been claimed.
Energy Secretary Amber Rudd said she has taken the allegation that Britain's pensioners are being misled 'very seriously', and has contacted the watchdog Ofgem to ask it to investigate further.
The Sun newspaper said it found details of E.ON payments to the charity contained within Age UK's annual accounts.
It is claimed the charity had been recommending a special E.ON tariff in leaflets and booklets, stating it was 'great value' and 'helps save energy and money'.
Age UK has been paid at least £6 million every year, receiving around £41 for every person that signed up, it was reported.
It is claimed that the tariff, on average, costs pensioners £245 more than they would pay on E.ON's cheapest deal.
A spokeswoman for E.ON said: 'Our current Age UK tariff was the cheapest product of its type in the UK when it was launched in January. Customers can switch between products at any time without incurring any costs.
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'If a customer is on a fixed tariff and they opt in for a price alert, and if we issue a new tariff that is cheaper, we will automatically notify them of that.
'But in line with Ofgem's rules we can't switch people without their consent.'
Declining to comment on the 'sensitive' nature of the amount paid to Age UK, E.ON did confirm there was a 'commercial relationship' between it and the charity.
Currently there are around 152,000 customers on the deal - equating to a £37 million overspend by pensioners, the Sun reports - who last year typically shelled out £1,049 for fuel for 12 months.
In January Age UK criticised the big six energy firms for overcharging and warned that more than 4.1 million older people were 'anxious' about high heating costs.
An Age UK spokesman rejected allegations that the charity has been pushing expensive tariffs and also the 'interpretation of the figures'.
The spokesman said: 'Age UK has worked with E.ON for the past 14 years, openly and above board, and they have been generous supporters of our charity over and above the number of customers on the tariff.
'We launched the most competitive, fixed two-year energy tariff available anywhere on the market on January 20 this year, with no exit fees.
'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.'
A spokesman for Ofgem said: 'Ofgem rules require energy companies to treat consumers fairly when they are marketing and selling energy. Ofgem has a track record of punishing firms who mislead consumers and we will look at carefully at these claims.'