Show energy customers savings to boost switching – Ofgem
The regulator ran a trial involving 50,000 customers from Scottish Power who had been on a standard variable tariff for three years or more.
These customers received letters from Energyhelpline showing how much they could save by moving to an E.ON tariff negotiated by the price comparison service.
Customers did not have to provide information about their existing tariff to see their personalised savings calculation.
Overall, 22.4% of customers in the trial switched compared to 2.6% of the control group who received no information about the trial.
People who switched saved a total of £3.3m, with an average saving of £298 each.
Rob Salter-Church, Ofgem’s interim executive director for consumers and markets, said: “Many customers on poor value default deals rarely switch because they think it’s too much hassle, or might not realise how much they can save.
“The results of this trial demonstrate that offering a simplified collective switch and providing personalised savings can be a big help in giving these customers the confidence and reassurance they need to start a switch.”
Almost a quarter (24%) of the switches made through Energyhelpline were by customers over 75.
Collective switching tariffs are negotiated, usually through an auction, and offer a unique, discounted energy tariff.
The success of this pilot has prompted Ofgem to plan a larger collective switching trial involving over 200,000 customers later this autumn.