Claimants could be hundreds of pounds out of pocket if they follow advice being sent out by the DWP on 10 million envelopes, Money Saving Expert Martin Lewis has warned. The DWP have refused his request to stop using the envelopes.
The DWP are sending a letter to 10 million people likely to qualify for winter fuel payments.
On the back of the envelope is the following message:
“What would you do with an extra £290?
“That’s how much the average consumer saved in 2020 by switching to the cheapest tariff on the market.
“For more information call the Citizens Advice Consumer service on 0808 223 1133
“Or visit: www.citizensadvice.org.uk/energy”
According to Martin Lewis, this is terrible advice. Most people should not be switching:
"The right move for most people right now is to DO NOTHING - don’t switch. That's because if you do nothing, you’ll either be on, or automatically moved to your provider's default standard variable tariff, which is priced capped. The price cap forces energy firms to sell energy at below its cost price – there is no meaningfully cheaper option.
"Due to the obvious hit to their finances, many big energy providers are trying to persuade people to move off those tariffs to fixed deals at premiums often far higher than 30%. They are using all the marketing tricks in the book to do it, and playing on the fact that until now that has been the right option.
"This is why this back of the envelope message, which seems to confirm that switching is the right move, is so dangerous – it adds a halo to the message from the energy firms to get people to switch.
"Of course no one wants to see paper wasted. Yet these envelopes could be held for the future, when hopefully things get back to normal. To use them now, and therefore putting out a damaging message when many people are already struggling with bills, is simply wrong.”
The DWP, however, are refusing to stop sending out the envelopes, arguing:
“This is an initiative that has been in place for a number of years to encourage switching and the latest batch of 10 million envelopes was created before the rise in energy prices. The message is simply a suggestion.
“It would’ve been impractical, costly and wasteful to replace the 10 million envelopes with new ones, and crucially it would potentially compromise our ability to make millions of Winter Fuel Payments before Christmas.”
