Energy firm tie-up represented the best deal at the time, insists charity
A major UK charity has hit back over claims it has been promoting unfavourable gas and electricity deals in return for cash.
Age UK has been accused by The Sun newspaper of recommending energy deals with the supplier E.ON which are more expensive than the firm’s cheapest offers.
In return, it has been reported that the charity has received around £6 million - which the paper claimed represents £41 for every person signed up - from the firm.
However, Age UK has defended its actions, claiming the deals offered were the best ones possible when launched.
We strongly reject the allegations and interpretation of figures.
A spokesman said: "We strongly reject the allegations and interpretation of figures.
"The Age UK fixed two year tariff offers a good deal and was the market leading two year tariff when launched in January. For example, the Age UK fixed two year tariff is over £100 cheaper than the E.ON Standard Variable tariff and is cheaper than other variable tariffs.
"When customers contact us they are offered a choice of all four E.ON tariffs and many choose the one year tariff or variable option, however many prefer the reassurance of a fixed tariff for two years.
"We have no exit fees so customers can move anytime if they find a different deal. This means they can pick a tariff that best suits their needs. E.ON also offers a free Price Alerts system that lets customers know of potentially better deals as soon as they’re available.
"The long term commercial partnership includes a typical commission to Age UK of £10 for each customer. Financial support beyond this is not linked to customer numbers.
"The past two years have seen much volatility in the energy market and with E.ON’s support we have managed to maintain our level of charitable work over this time. This reflects the strength of the 14 year relationship.”
An E.ON spokesman also defended the deal, saying: "We always work to make sure our tariffs, for all customers, are competitively priced and that is further evidenced by the fact that our current Age UK tariff was the UK's cheapest product of its type in the UK when it was launched, a two-year fixed deal, and when we launched our current one-year fixed product, it was also the cheapest in the UK."
Energy industry regulator Ofgem has been asked to investigate the deal.
Westminster energy secretary Amber Rudd said: "People expect a fair deal when it comes to their energy bills, not a rough deal.
"I take very seriously this allegation that Britain's pensioners are being misled, so immediately contacted Ofgem who will now investigate this urgently and report back to me."
Ofgem said its rules required energy companies to treat consumers fairly when they were marketing and selling energy.
It said: "Ofgem has a track record of punishing firms who mislead consumers and we will look at carefully at these claims."
Andrew Hind, chair of the Fundraising Standards Board, said: “We have contacted Age UK with regards to claims made about its commercial arrangements with E.ON. While the terms of the energy deal lie firmly under Ofgem's jurisdiction, our focus will be to assess whether the charity has breached any aspect of the Code of Fundraising Practice and we will work closely with Age UK and Ofgem to establish this.”