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Energy switching – spending time to save money

A light bulb in the snow

Today the last of the six big energy companies’ price rises comes into effect. Eon’s customers can switch to save money, but how long does it take to feel the benefit?

Eon customers – of which I’m one – are the last group of energy customers to be affected by this year’s inflation busting hikes (unless you’re with a smaller supplier). But as the snow falls this morning, this delay is little comfort when we face a bill increase of almost 9%.

So what should I do about this year’s hike? Looking at my latest bill, I definitely need to find ways to cut down my heating costs and think about whether my draughty house could be a bit more insulated.

Switching to save

But I also decided to go to Which? Switch and see whether I could get a better deal by switching supplier. Sadly the current deals don’t seem to offer me much of a saving, so immediately I wondered if I could be bothered with going through the hassle of changing my tariff.

Of course, switching your supplier is fairly straight forward. And a lot of people who are on poor value deals – like the three quarters of energy customers on standard tariffs – could potentially save a couple of hundred pounds by getting onto a better tariff.

But the fact remains that switching should be even simpler. And one of the main things that needs to be tackled is the length is takes for a switch to take place.

Which? highlighted this in our ‘Imbalance of Power’ report that we published before Christmas. The report set out how the energy market has been failing consumers. As well as making the case for tariffs to be radically simplified through a simple, single unit price, it also argued that the switching process needs to be improved.

Time is money

At present, the average switch takes between five and six weeks. And during this time customers have little information about what is going on. This means that the gains from switching don’t benefit my budget immediately, unlike similar money-saving moves like choosing a cheaper supermarket.

The EU has tried to tackle this through legislation requiring a three-week switch. But the UK government proposed a two week ‘cooling off’ period before the switch commences, meaning that it will still take up to five weeks.

This doesn’t seem to be the case in other EU countries. In Ireland and Norway you can switch in a week, while in Finland, France, Portugal, Spain and Sweden it takes around two weeks. So why should it take so long here?

I may end up deciding to switch supplier, if I can find a cheap enough alternative. If I do, why should I have to wait such a long time to see the financial benefit of switching?

Comments
Guest
sue greenbank says:
18 January 2013

switched in october 2012 for fixed until december 2013 told them what i use, they gave the amount i would pay monthly which was lower then my previous provider now they want to up my amount so whats the point

Guest

Sue, if it is “fixed” until December 2013 how is it your energy company can increase your charges “now”.? Did you mean December 2012? We have recently completed our third switch in about 3 years and this experience indicates that it seems best to switch to a “fixed”deal.
The sooner switching time is reduced to no more than 3 weeks the better. Three cheers to the EU! What is the ulterior motive that has made the UK government try and prevent this?

Guest

I cannot understand why the switching process takes so long. There is no practical reason – so long as accurate meter readings are available and status checks completed [which are virtually instantaneous nowadays as I recently discovered] then the switchover from one supplier to another should be automatic. The cooling-off period could still apply if there was a “reinstatement without detriment” guarantee to protect consumers against misselling or mistakes but the benefit of the preferred tariff would be available sooner. Many switches are desired because of a change in circumstances [like house no longer occupied all day or change of fuel for heating or cooking] that would attract a better tariff from a different supplier. In pushing for smart meters the energy companies are enabling switching to be done overnight and they won’t have a leg to stand on if they want to hang on to accounts for longer than is absolutely necessary.

Guest
Burton says:
21 January 2013

I have read much of the correspondence about energy suppliers on the Which website. What puzzles me is that last year, as a result of a major Which campaign I moved from my then supplier to The Co-operative supplier. I have seen absolutely no mention of The Co-operative as a good value supplier in all this correspondence, despite the assurance that this was the best supplier in town. My monthly direct debit went from £110 per month previously to £129 with The Co-op which doesn’t, seem to me to be going in the right direction…..Perhaps that’s why there’s no mention?

Guest

Burton,
I’m inclined to generally agree with you. Last years “which” initiative, “the big switch” was I’m sure well intentioned but really was not “the game changer” I kept reading about on this forum (written mostly by “Which” staff). Never thought it would be and said so at the time, but no one likes to hear “told you so”, better therefore probably not to dwell on it.

The only thing we seem to read about nowadays in the ongoing battle against ever increasing energy cost is “switching”. Well the best we’ll get from that is short term gain because over say a five year period the difference in price between any of them (especially with the big six cartel) is going to be minimal. I know this because I’ve been a serial switcher and I’ve kept score on the exercise. All we really end up doing is dodging price increase dates, or getting a fixed deal giving a relatively short term gain.

We need a radical rethink on energy supply. Privatisation has not worked, competition such that there is (not much) has not benefited the consumer with fair prices.
I’m all for re-nationalisation but with a strong independent overseeing body to ensure we don’t get the problems we got with the old inefficient nationalised system.
Even if prices didn’t come down I’d be happier that profit came back to the nation rather than went to lining the pockets of share holders.

I’d like to see a “Which” investigation into the pros and cons of re-nationalisation, and perhaps a subsequent debate.

Guest

Using the British Gas Parent company, Centrica’s Accounts for 2011, It can be calculated, that for gas, the Government take 22% Tax (including ‘green’ and ‘social’ initiatives). Their profit is less than 3%…!!!!!!!
The Government takes the lion’s share after the wholesale cost of the gas. Thus, there is no room for competition. Switching tariffs and or suppliers in the long run a waste of time…
It will get worse are the Government are set to grab more and then weep fake tears about how nothing can be done….

Guest

I have signed up to receive information about one of the ‘Ready to Switch’ collective switching schemes and will receive information about their offer soon.

Can anyone tell me if these schemes are worthwhile?

Guest

I see you posted the outcome of the collective auction on the “Your view: are you happy with your energy supplier?” Conversation. Surprise winner and a good result.