Switches up by nearly 30% as millions go ‘energy shopping’
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%.
In this way, switching rates last year reached their highest level since 2010, at around 15.8% across gas and electricity customers.
Of these switches, nearly half (47%) 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.
Unlike other industry figures, Ofgem’s data tracks the annual switching trends across the whole of Great Britain’s domestic retail energy market.
It’s never been easier to change supplier, as the vast majority of switches take three weeks to complete including a 14 day ‘cooling off’ period. In comparison, three years ago it took around five weeks to switch supplier.
Despite rising switching rates, however, around two-thirds of customers still remain on standard variable tariffs.
Ofgem’s CEO Dermot Nolan comments: “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.”
“Big savings of around £230 are available and switching has never been easier, so we would urge everyone to shop around for a better deal, especially if their supplier announces a price rise.”
Ofgem is a leading provider of authoritative, accurate and impartial data on the energy industry for consumers. We update our data regularly.
For impartial, simple advice on switching visit www.goenergyshopping.co.uk.
Notes to editors
1. Last year 7.7 million switches took place as customers changed supplier; a 28% increase from 2015. This includes 4.4 million electricity switches and 3.4 million gas switches – this is an increase of 30% for electricity and 24% for gas switches.
2. Our data is based on the number of meter points a supplier gains from another following a customer choice to change their supplier.
Please note that this does not equate to 7.7 million individual customers switching, as many of these will be dual fuel customer switches, and also because some customers may have switched more than once during the year.
3. Switching rates measure the number of switches that have taken place in a 12-month period against the number of meter points. In 2016, this figure was higher for both gas & electricity customers than in each of the previous five calendar years
|Annual switching rate - electricity||Annual switching rate - gas|
4. As of 28 January 2017, the cheapest dual fuel deal on the market was £834 per year, and the average standard variable tariff on offer from one of the six larger suppliers was £1,066 per year.
5. The vast majority of switches now take 21 days to complete from the moment a customer makes the decision, following action by Ofgem and government helped deliver changes to industry arrangements at the start of 2015. This includes a 14-day cooling off period where a customer can change their mind. Many suppliers have signed up to a voluntary Switching Guarantee which makes sure the new provider arranges everything and that final bills and refunds are timely and accurate.
Compare this to three years ago when it used to take around five weeks to switch supplier.
6. There are around 28 million electricity and 21 million gas meter points in Great Britain. Many of these take their gas and electricity from the same supplier, with on average 70% of electricity customers, and 80% of gas customers, having dual fuel accounts.
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
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