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Number of customers switching energy provider passes 3.8m in first half of year

Published 06/09/2016

More than 3.8 million switches took place between January and June as people changed their energy supplier
More than 3.8 million switches took place between January and June as people changed their energy supplier

The number of UK households switching their energy provider rose by 30% in the first half of the year, according to Ofgem figures.

More than 3.8 million switches took place between January and June as people changed their energy supplier - around a million more than the same period last year, the regulator said.

Around 1.6 million domestic gas customers and 2.2 million domestic electricity customers found new suppliers.

However, the figures also show that 66% of domestic customers are still on the most expensive standard variable tariffs.

Last month Ofgem said it will work closely with suppliers to help "disengaged customers" who remain on expensive tariffs to shop around for better deals.

The watchdog's response followed a report published by the Competition and Markets Authority (CMA) in June setting out ways in which the market could be improved for customers.

Following a two-year investigation, the CMA warned that 70% of people were on the more expensive "default" standard variable tariff, costing consumers £1.4 billion more than a competitive market.

Ofgem said customers could save more than £300 by leaving expensive standard variable tariffs for the cheapest deal, often a fixed-term tariff.

The average standard variable tariff of the larger energy suppliers as of July 28 was £1,066 compared with the cheapest tariff available on that date - a one-year fixed tariff - costing £758, a saving of £308.

Ofgem senior partner for consumers and competition Rachel Fletcher said: "Great deals are there for the taking. There are very competitive offers and many more suppliers to choose from, and that's why more consumers are switching."

Small Business, Consumers and Corporate Responsibility minister Margot James said: "Thanks to Government action, it's easier and quicker to switch than ever before. The number of suppliers has more than tripled since 2010 and it is great to see more people have already taken advantage this year by switching and saving money on their bills."

Mark Todd, the co-founder of price comparison site energyhelpline.com, said: " Switching energy suppliers is taking off with a 30% rise announced today, showing consumers are getting savvier.

"However, with 66% of consumers still on expensive standard variable tariffs, there is a long way to go. Energy suppliers continue to benefit from the blind loyalty of consumers. Customers who don't switch are effectively giving their supplier money unnecessarily. Households must replace their passive approach with a more proactive one, holding suppliers to account for their service."

Juliet Davenport, the chief executive of independent supplier Good Energy, said: " I think this news is perhaps the first sign that the giant, old-fashioned energy companies are coming to an end.

"For far too long the big six have taken loyal customers for granted. Smaller suppliers are taking more customers than ever before as consumers look for better service, fairer prices and green energy."

Roger Witcomb, who chaired the CMA's energy market investigation, said: " We are pleased to see that increasing numbers of households are taking control of their energy bills by shopping around and switching suppliers. We hope that the CMA's high-profile investigation, along with government campaigns, has played a part in that rise.

"We also expect that as the many measures in our final report aimed at driving competition between suppliers, protecting vulnerable consumers and helping consumers to switch, are implemented in the next months and years, fewer and fewer consumers will be paying much more than they should."

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