Energy switching hit a six-year high last year as more households shopped around for a better deal. 7.7 million gas or electricity switches took place in 2016, according to new data from Ofgem. This is 1.7 million more switches than the previous year, a surge of 28 per cent.
In this way, switching rates last year reached their highest level since 2010, at around 15.8 per cent across gas and electricity customers. Of these switches, nearly half (47 per cent) were to small or medium suppliers as they continued to attract growing numbers of customers.
In recent weeks some suppliers have announced price rises for customers on standard variable tariffs, which are typically more expensive than fixed deals. With savings of around £230 a year on offer from switching to the cheapest deals, it’s even more important to shop around. Ofgem’s data tracks the annual switching trends across the whole of Great Britain’s domestic retail energy market. Despite rising switching rates, however, around two-thirds of customers still remain on standard variable tariffs.
Ofgem’s CEO Dermot Nolan said “This welcome increase in switching should serve as a warning to supply companies. If they fail to keep prices under control or do not provide a good service, they risk being punished as customers vote with their feet. While today’s figures show good progress, the market is not as competitive as we would like. That is why we have put a temporary price cap in place to protect people on prepayment meters who have the least access to competitive deals and why we are pursuing a raft of reforms which will make this market fairer, smarter and more competitive for consumers.”
In response, Gillian Guy, Chief Executive of Citizens Advice said “Shopping around can save significant amounts of money – especially if you’ve never switched before. Anyone looking to switch supplier can use our independent online comparison tool to help find the best deal for them.It is good that more and more customers are switching – but there are still millions of people stuck on a standard variable tariff and who are often paying hundreds of pounds more for the same gas and electricity.
“The government has said it would intervene in the market if necessary – and we encourage them to do so. An easy way to cut bills for some of the poorest households would be to extend the prepayment cap to those eligible for the warm homes discount. This would help struggling households and low income families to heat and light their homes.”