Age UK halts controversial energy deal with E.On

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Charity Age UK and energy provider E.On have suspended a branded tariff following criticism of the deal.

On Thursday, the Sun newspaper claimed the charity was earning £6m a year from recommending energy deals that were not the cheapest available.

The withdrawal, for new and renewing customers, was prompted by "continued speculation regarding the partnership".

Customers on existing Age UK tariffs are unaffected by the move and can continue until their contract ends.

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

Mr Foy told BBC News said that E.On would not offer the deal at the same level as Age UK wanted, and so it was being "temporarily suspended". E.On said the halt was a mutual decision.

The deal was offered by the charity's commercial arm, from which profits go to the charity itself.

'Right to pause'

The Sun claimed that Age UK recommended a special rate from E.On which would typically cost pensioners £1,049 for the year - £245 more than its cheapest rate in 2015.

It also alleged that Age UK received about £41 from energy supplier E.On for every person signed up.

Age UK said that at the time it was the leading nationally available tariff of its kind, and has said it questions the newspaper's interpretation of the figures, including a comparison between the cost of one-year and two-year fixed deals.

Energy regulator Ofgem and the Charity Commission said on Thursday that they would investigate Age UK's behaviour.

A statement by 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."

Age UK stressed that all versions of its branded energy tariff had no exit fees, so customers could switch at any point without incurring any charge.

The tariff will no longer be available from the end of Tuesday to new and renewing customers.