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Five million switch energy firms but two-thirds on expensive tariffs

Published 24/11/2016

Ofgem said 5.5 million energy firm switches took place this year to September, a 28% increase on the same period last year
Ofgem said 5.5 million energy firm switches took place this year to September, a 28% increase on the same period last year

Customer switching between energy companies has hit a four-and-a-half year high but two-thirds of all households remain on the most expensive tariffs, Ofgem figures show.

The regulator said 5.5 million switches took place this year to September, a 28% increase on the same period last year.

In September alone, around 15% of electricity and gas customers switched suppliers as switching rates reached their highest level since February 2012.

However, 66% of all households remain on expensive standard variable tariffs.

The cheapest deal currently on the market at £822 a year is around £250 less than the average large supplier standard variable tariff of £1,066, Ofgem said.

Ofgem has called on suppliers to reach out to those who have not switched and offer them a better deal, particularly disengaged loyal customers who are still on expensive standard variable tariffs, ahead of the delivering reforms set out by the Competition and Markets Authority.

Ofgem senior partner for consumers and competition, Rachel Fletcher, said: "We welcome the fact that more consumers are switching to take advantage of the cheaper deals or better service on offer.

"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."

Meanwhile, Extra Energy has come bottom of the latest Citizens Advice complaints table for the third consecutive quarter as customers continued to report billing problems.

The firm has ranked lowest in the table, which measures how well energy suppliers are handling customer complaints, since the start of 2016 although it has improved slightly on the last quarter.

Scottish Power and npower continued to improve their performances, with both of their complaints ratios dropping by around a third on the last quarter.

Newcomer Places for People Energy replaced SSE at the top of the table with a record score of 19 complaints per 100,000 customers.

Citizens Advice chief executive Gillian Guy said: "All energy suppliers should be delivering a first rate service as standard and resolving their customers' problems quickly instead of letting them drag on.

"It's good to see that some energy firms are starting to get to grips with billing issues that have been causing such a headache for their customers. It's crucial that all suppliers act fast to clear up these problems sooner rather than later."

Chief Ombudsman Lewis Shand Smith said that while it was "fantastic news" that more people were switching, his office received 4,390 complaints about the process in the year to November.

He said: "When it comes to renewing your energy deal, it's always important to shop around. It's an important tool for consumers to get the best deal they can and to avoid being on an expensive tariff with their provider, but switching can be tricky and time consuming, which puts a lot of people off."

A survey for Saga has found almost half (48%) of over 50s have switched energy provider in the past five years.

However, one in five (22%) did not make the savings they expected and one in seven said the hassle of switching outweighed any savings made.

Saga's head of communications Lisa Harris said "We found an increasing number of people switching providers and finding the process easier than ever before.

"However, it is clear that the process needs to be further simplified as some older people are still confused by the process and face the prospect of having to either cut back on essential spending or stay in bed for longer to stay warm this winter."

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