/ Home & Energy

Why should you switch your energy supplier?

switch-electricity-supplier

When did you last switch your energy supplier? In the last year or two? Longer ago? Or perhaps you’ve always been with the same one.

If you’ve never switched, you’re not alone.

According to the Competition and Market Authority’s (CMA) June figures, more than half of energy customers in England (53%) remain with the incumbent supplier for either their gas or electricity supply, or both. For Scotland it’s 65% and Wales 61%.

I switched my electricity supplier just under a year ago – but by default. I moved flat and, with my new home, gained the previous tenants’ energy supplier.

How many people are switching their gas or electricity supplier each year is one of the key measures used by regulator Ofgem (and the government) to monitor the energy market and how well it’s working. The recent CMA review and Ofgem’s response aim to increase switching as part of making the energy market better for consumers.

At the moment, switching levels are low. But why? To find out, we surveyed 5,209 UK energy customers, and these were the top four reasons…

1. I’m happy with my current supplier

The top reason for not switching energy supplier, given by 44%. It’s great news if you’re a happy customer; but if you haven’t switched in the last five years, chances are you’re on your supplier’s variable tariff. This is the default tariff and usually the more expensive.

You might not be so happy to find out that you could be wasting £369 each year on energy. Which? research found that this is the average saving for people using our independent website to change energy suppliers.

2. All the suppliers are pretty much the same

The gas and electricity you use in your home is the same, regardless of the supplier you are with. But there are huge differences between suppliers – specifically in their prices and what their customers think of them.


In June we checked variable dual fuel tariffs from the Bix Six energy providers (British Gas, EDF, Eon, Npower, Scottish Power and SSE). We found that – on average – they were £329 more expensive than the very cheapest fixed dual fuel tariffs on the market.

Plus we found that the gap between the Big Six suppliers’ average standard dual fuel tariffs and the cheapest tariff has widened significantly in the last two years. From 2014 to June 2016, the price difference increased from £182 to £329.

Prices aside, our annual satisfaction survey on energy companies reveals big differences between suppliers, according to their customers. Our most recent survey of over 8,000 energy customers revealed that top provider Ovo Energy had an 82% customer score, while Npower found itself at the bottom of the table with a 41% customer score.

3. Switching would be too much hassle

This was the third reason onto the podium, and the barrier to switching for 21%. The potential gain from a new supplier seems to be outweighed in people’s minds by the workload involved to achieve it.

But switching energy supplier doesn’t have to be a huge hassle – a few clicks on a price comparison website that includes all the tariffs on the market. One example that will find the cheapest for you is our website Which? Switch – use this and you’ll see whether the saving is tempting enough to switch.

4. I’m already on a good deal

It’s a good feeling to know you’re on one of the cheapest deals on the market. But if it’s a fixed tariff, when it comes to an end (they’re usually one or two years long) you’ll automatically move onto your supplier’s default standard variable tariff. This is usually more expensive so keep an eye out for another good deal – and switch to it within the last 49 days of your current tariff. That’s when you can’t be charged an exit fee for leaving.

Do you agree? If you haven’t switched, what else is holding you back? Tell us in the comments below.

Comments
Member

I’ve been trying to help elderly neighbors change, basically that just do not trust the process.
Or they’ve been sold lies by people on the doorstep and are locked into 3 year deals with high exit fees
I on the other hand change almost once a year.

I actually had 2 young ladies knock on the door yesterday “Hello, have you seen the Energy Report, would I like to save money on my utility bills,?”

Selling energy on the doorstep should be illegal. They were using a name presumably designed to make people think they were Martin Lewis Money Saving Expert too.

Member

Hi William, thank you for your comment. Can you tell us any more about the two women who knocked on your door? Do you know who they were representing?

Member

Misusing information seems a rather deceptive tactic to me. It is said that:

“In June we checked variable dual fuel tariffs from the Bix Six energy providers (British Gas, EDF, Eon, Npower, Scottish Power and SSE). We found that – on average – they were £329 more expensive than the very cheapest fixed dual fuel tariffs on the market.

Plus we found that the gap between the Big Six suppliers’ average standard dual fuel tariffs and the cheapest tariff has widened significantly in the last two years. From 2014 to June 2016, the price difference increased from £182 to £329.”

What it fails to do is look at the cheapest tariffs that the “Big 6” offer. In fact, for a medium user, 3 of the Big 6 offer 4 tariffs among the cheapest nine – all within £20 of each other.

Comparing the most expensive (standard) tariffs offered with the cheapest (fixed price generally) available is not a sensible nor fair comparison – unless you are desperate to make a point. Those on expensive tariffs have only to ask their supplier to put them on one of their cheaper ones.

Member
Chris W says:
30 August 2016

Perhaps their supplier should make sure they are on a cheaper one, get rid of different tariffs and also award customer loyalty which never seems to be rewarded these days!

Member

We should beware of some claims. Currently “you could save £329 a year if you switch from a standard variable tariff to a fixed price fixed term one”. However, what happens if most people were to switch? The revenue would drop like a stone, profits would disappear and all that would happen would be…..fixed price fixed term tariff would rise to compensate. So the £1.3 bn “saving” claimed elsewhere is quite illusory.

I see little point generally in having fixed price tariffs; they are being subsidised by the standard variable ones. So I would abolish them in the main and have a standard variable tariff as the principal one, based on what it really costs.

Concentrate then on tariffs that would help users with different energy use from the norm.
Off peak: electricity is cheaper, depending on time of day, and smart meters would let this be recorded. So charge perhaps in 1 or 2 hourly chunks, then those who organise their main usage away from peak times would benefit.
Low users – return to two tier tariffs where the first usage recovers essential fixed costs, dropping to a lower unit after that.
Fixed price: for those who really want to budget carefully, but not heavily subsidised. They may be above or below SVM.
Prepay meters: the same tariffs as offered to others.

Member

I’m with Ovo and I’m not automatically moved to another tariff every year, they ask first. I’m happy I switched to them and won’t move from them, that is until ?Which say they are now part of the Infamous Seven.

Member

Likewise Sophie, I am happy with OVO and see no reason yet to switch.

Member
Patricia says:
18 August 2016

I also looked at Ovo about 6mths ago – but didn’t know anything about them – so ‘chickened out’