Switching at a 4.5 year high as more people shop around for a better deal
Press release
Publication date
Industry sector
Supply and Retail Market
5.5 million switches have taken place this year between January and September – a 28% increase on the same period last year - as customers shop around for their energy, Ofgem’s data shows.
This includes 2.3 million domestic gas switches, and 3.1 million domestic electricity switches, as customers changed supplier.
In September, around 15% of electricity and gas customers switched suppliers, as switching rates (switches over a 12 month period) reached their highest level since February 2012.
There are big savings to be made by switching, with the cheapest deal currently on the market (£822 per year) around £250 less than the average large supplier standard variable tariff (£1,066 per year). With the majority of switches taking place within three weeks, it’s never been easier or quicker to switch suppliers.
However, while those who are active in the market are getting better deals, our data shows that 66% of all households remain on expensive standard variable tariffs.
This is why Ofgem is taking forward the Competition and Markets Authority’s (CMA) reforms as part of a programme to make the market more competitive, fairer and smarter.
Ofgem wants suppliers to reach out to people 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 delivery of the CMA reforms.
As part of the CMA reforms, we are also introducing a price cap which will save millions of households on prepayment meters an estimated £75 a year from April [2017].
Rachel Fletcher, Ofgem senior partner, Consumers and Competition, said: “We welcome the fact that more consumers are switching to take advantage of the cheaper deals or better service on offer.”
“There are big savings to be made from shopping around for a better deal and you can find advice from www.goenergyshopping.co.uk.
“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.”
Ofgem is a leading provider of authoritative, accurate and impartial data on the energy industry for consumers. We update our data regularly.
Notes to editors
Switching statistics
1. Our data shows between July and September 1.7 million switches took place. This includes:
- 960,000 electricity switches (compared to 770,000 switches in Q3 2015)
- 700,000 gas switches (compared to 600,000 switches in Q3 2015).
As of September, around 56% of all switches went to the six large suppliers, around 20% to the mid-tier suppliers and 23% to the small suppliers.
The number of customers switching supplier shown in our data is based on the number of meter points a supplier gains from another following a customer choice to change their supplier.
Please note that this does not equate to 1.7 million individual customers switching, as many of these will be dual fuel customer switches, and also because some customers may have switched more than once.
2. Taken with January – June data, in total 5.5 million switches have taken place this year. As above, this does not equate to 5.5 million individual customers switching.
3. Switching rates measure the number of switches that have taken place in a 12 month period against the number of customers. It is a rolling figure, so it is recalculated every month. In September this figure was higher for both gas and electricity customers than in previous months.
4. As of 21 November 2016, the cheapest deal on the market is £822 per year, and the average standard variable tariff from the six larger suppliers is £1066 per year.
5. Three years ago it used to take around five weeks to switch supplier. Now the vast majority of switches take three weeks to complete from the moment a customer makes the decision after Ofgem and the government helped deliver changes to industry arrangements at start of 2015. This includes a 14 day cooling off period where a customer can change their mind. Many suppliers have signed up to a voluntary 21 day Switching Guarantee which means customers are entitled to compensation if process takes longer.
6. There are around 28 million electricity and 22 million gas customers in the UK. Many of these are dual fuel, with on average 70% of electricity customers, and 80% of gas customers having dual fuel accounts.