Customer Behaviour

Almost five million households switched their energy supplier last year in a record 26% increase on 2015, figures show. Some 4.8 million consumers changed electricity supplier in 2016, almost a million more than in 2015, industry body Energy UK said.

In December, the number of switches reached 449,921, up by 33% compared with the same month in 2015, with 22% to a smaller supplier.

The figures continue a trend of increasing switching over the past two years, and come amid repeated advice from consumer groups and ministers that it is the best way for households to save on their energy bills.

Energy UK chief executive Lawrence Slade said: “It is fantastic that switching levels are continuing to soar with almost five million households changing supplier last year.

“Across the industry, energy companies are doing more to engage with all of their customers, making it easier for people to be on the right tariff whether that’s with their current supplier or by switching to one of the 40-plus suppliers active in the market.”

However, Ofgem figures last month showed that three quarters of British Gas customers are stuck on the company’s most expensive tariff and could save £174 by switching to a cheaper supplier, while 91% of SSE’s customers – or 3.8 million households – remain on the most expensive deal.

Ofgem said around 66% of all households remain on standard variable tariffs, which are “typically” more expensive than fixed deals.

The CMA announced last month that suppliers will be required to provide Ofgem with information to help households and microbusinesses on expensive tariffs switch to a better deal.

Emma Bush, energy spokeswoman at comparison site uSwitch, said: “People need to act now to avoid being hit by higher energy bills this year.

“EDF Energy has already announced plans to hike its electricity prices by 8.4% from March and the rest of the big six are likely to follow suit.

“Today’s figures are encouraging, but to help competition the industry should be committing to a switching target of 25% by 2020.

“The Competition and Markets Authority’s (CMA) package of remedies will help achieve this and needs to be implemented quickly to drive greater choice, better customer service and reduce bills.”

Ed Kamm, the managing director of provider First Utility, said: “What this latest Energy UK data shows is that the same customers who are already engaged in the market remain engaged and are switching more regularly.

“While that is obviously a good thing, it hides the real issue: an enormous number of households are being taken for a ride because they are on a standard variable tariff and are still not switching.

“The Government has said it will do something if there is evidence of market failure, which there clearly is.

“First Utility believes it needs to act fast to help all those people paying over the odds before the costly winter months are over.”

A Department for Business, Energy and Industrial Strategy spokesman said: “While it’s good to see more people than ever before benefiting from

Government action to increase competition, millions of energy customers continue to pay too much.

“As we have made clear, it’s vital that the energy market works for everyone, not just those who can shop around for the best deals.”

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