More households than ever are changer energy supplier according to the latest figures, with a record 660,000 customers switching in February this year.
According to industry body Energy UK, switches in February rose by 60% year-on-year with one million households now have already made a switch in 2018. They said, that one of the contributing factors may have been the cold snap we experienced during February, prompting people to try and get more for their money. Figures from energy watchdog Ofgem corroborate Energy UK’s findings with the regulator also finding a high volume of people changing energy provider.
“The energy market has never been so competitive, and it’s great to see record numbers of consumers engaging in the market to get a better deal,” said Lawrence Slade, the chief executive of Energy UK.
The flurry of change-over activity will be welcome news for Ofgem. The regulator has been trying to encourage customers on expensive tariffs to swap providers for a long time, often with little success. One of the factors for the sudden increase in activity could be Ofgem’s collective switching scheme which targets customers of one of the large energy companies who haven’t switched for a long time and negotiates a better deal on their behalf. There have been efforts from third parties to assist large number of consumers to switch at the same time for years now, but it appears that they might finally be having a substantial impact.
The figures will make less pleasant reading for some of the bigger players in the energy market, with around one fifth of customers opting to leave one of the ‘big six’ energy giants for smaller independent suppliers. There has been a bit of shift in consumers’ thinking regarding larger energy companies over the past year, with many consumers feeling they are not getting their money’s worth after being put on expensive Standard Variable Tariffs (SVTs). The new data come as new legislation is being pushed through parliament to cap SVTs to fix the “broken market”. Energy Minister Claire Perry acknowledged that the stats showed increase levels of competition but insisted that a cap on SVTs was still necessary.
“With around 60 companies to choose from, consumers can make big savings if they shop around,” she said.
“But we know there are still around 11m households on the most expensive energy tariffs. That’s why the Government is taking action to bring in measures to cap these default tariffs and protect people from high energy bills by next winter.”.
British Gas has been one of the hardest hit companies, with their parent company Centrica announcing they will be making around 4,000 redundancies this year. Centrica has blamed high levels of competition as well as the government’s energy price cap on the lay offs although many will point to British Gas raising its prices for many customers last year by an eye watering 12.7% as a reason for lost custom and thus revenue.
Lewis Shand Smith, chief ombudsman at Ombudsman Services believes that the increasing number of people switching suppliers was largely down to how easy it is to swap. “In 2016 we received 3,066 complaints about switching, down by 36pc from 2015. This indicates that companies are getting better at managing transfers and any complaints related to them, which is good news for consumers,” he said.
