Energy switching at near five-year high but many still on pricey standard tariffs
There were 5.5 million energy switches in the nine months to September, which represents a 28% increase on the same period last year according to data by regulator, Ofgem.
This includes 2.3 million gas switches and 3.1 million electricity switches, as customers changed supplier.
Ofgem found that 56% of all switches went to the six large suppliers (British Gas, EDF, E.on, Npower, SSE and Scottish Power), about 20% to the mid-tier suppliers and 23% to the small suppliers.
The regulator said there are big savings to be made as the cheapest deal currently on the market stands at £882 per year, which is £250 less than the average large supplier’s standard variable tariff at £1,066 per year.
While active switchers can get better deals, Ofgem data found that 66% of all households remain on their suppliers’ expensive standard variable tariff.
As a result, together with reforms brought forward by the Competition and Markets Authority (CMA), Ofgem wants suppliers to reach out to people who’ve not switched to offer them a better deal.
It will also introduce a price cap which will save millions of households on prepayment meters an estimated £75 a year from April 2017.
Rachel Fletcher, Ofgem senior partner, consumers and competition, said: “We welcome the fact that more consumers are switching to take advantage of the cheaper deals or better service on offer.
“There are big savings to be made from shopping around for a better deal and you can find advice from Goenergyshopping.
“But suppliers must do more to reach out to people who have not switched and offer them better deals so that competition drives down prices for everyone, including loyal customers. Otherwise public trust will not be restored in the energy market.”