Charity Commission criticises Age UK over links to E.ON

The Charity Commission has criticised Age UK and recommended major changes following an investigation into the charity’s relationship with energy company E.ON. In February of this year, The Sun newspaper claimed that Age UK’s commercial arm, Age UK Enterprises division, was overcharging customers who had taken up a special E.ON/Age Concern gas and electricity deal. E.ON paid Age UK a £6m commission on the deal. A subsequent investigation revealed that Age UK Enterprises had made millions from insurance and funeral services. The energy regulator felt there was no case to investigate. However, the Charity Commission has called on Age UK to reconsider its involvement with E.ON. and to be more transparent about commission and fees received. Age UK has already implemented some of the commission’s recommendations.

The charity Age UK has been criticised and told to make significant changes by the Charity Commission after an investigation into its controversial relationship with energy supplier E.ON.

In February both organisations found themselves at the centre of a media storm, after the Sun claimed Age UK’s Enterprises division was overcharging customers who signed up to a special E.ON/Age Concern gas and electricity tariff marketed to older customers.

About 150,000 customers were overpaying to the tune of £240 a year, the paper claimed at the time, while E.ON has paid the charity a £6m commission.

The story prompted the energy secretary, Amber Rudd, to ask Ofgem to investigate the deal. At the time, both parties had argued that the tariff was similar to many others on the energy market in that it had been good value at the time it was sold, but had slipped down the best-buy table in the intervening months.

It later emerged that Age UK had made millions of pounds by providing insurance and funeral services to elderly people via its commercial arm, Age UK Enterprises Ltd. The energy tariff was suspended while Ofgem investigated the matter.

The energy regulator said that having investigated the matter it had “concluded that there is no case to open an investigation”.

However, following its own investigation the Charity Commission has criticised Age UK for not being clearer about the nature of the commercial partnerships across the range of services, and the fee or commissions received by the charity through its Enterprise subsidiary.



David Holdsworth, the chief operating officer at the Charity Commission, said Age UK should now consider whether its continued involvement with E.ON was in the charity’s best interests.



“Although the charity had oversight mechanisms, the commission found these were insufficient and needed to be kept under more regular review. Any fee or commission that the charity receives through these arrangements must be clear and transparent.”

He said Age UK needed to do more to show any commission or fees received by the charity on all its branded products. He noted that the charity had already implemented some of its recommendations.

An Age UK spokesperson welcomed the two reports, saying: “We are especially pleased that, with respect to the Age UK energy tariff, Ofgem has found no breach of the regulations, and that the commission has addressed the misconceptions about pricing and has acknowledged that the tariff had regard to the particular needs of older people.

“We accept we can never be too transparent and our trading arm needs a sharper demarcation from the Age UK charity.



“We want every customer of our trading arm to know who they have bought from, that any surplus is then gifted to our charity, and how this then benefits older people in need. We will be making some changes so this is always crystal clear.



An E.ON spokesman said: “We are clearly pleased that Ofgem has found there is no case to open an investigation regarding our relationship with Age UK Enterprises. We take our regulatory requirements extremely seriously and we continue to put our customers first.”



Ofgem said the episode had prompted it to write to all suppliers reminding them that relationships with charities and other trusted organisations required appropriate oversight.

