/ Home & Energy

Should I join the 200,000 who are making The Big Switch?

Have you signed up to The Big Switch? As it’s a UK first, we’ve invited our sister organisation – Consumentenbond from the Netherlands – to come and explain how it worked for them.

Nowadays it’s easy to send meter readings to my energy supplier – and even to switch companies – I can do it via the internet which saves a lot of paperwork.

I keep telling consumers it’s really simple, but just as it leaks at the plumber’s house, this advisor often forgets to do what he advises…

My energy bill went up by €200

In the Netherlands you pay the same monthly amount for your energy throughout the year. This prevents low bills in summertime and – more importantly – high bills in wintertime.

At the end of the year the supplier sends the costs statement and bill for the whole year, based on your stated fuel consumption. This could mean that money is returned or that an additional amount has to be paid. We always hope it’s the former, but with current energy prices we usually have to pay a surplus.

Despite the energy saving measures, such as additional insulation, we installed in our home last year, I ended up paying an extra €200. And to my not so pleasant surprise I saw my monthly payment go up by €25!

How is this possible? The answer should be in my annual statement, but unfortunately this appears to be a jumble of information. After some detective work, I gave up and decided to just pay the €200 – but I still felt robbed. Perhaps I’d be better off with another energy supplier?

So I started my investigation: there are plenty of suppliers and websites that give all sorts of useful information. But it all seems a bit confusing. It takes a lot of time and effort to compare various suppliers with complex schedules, rates, contract types. And after a few hours studying, I still had no clue what the best offer would be for me.

The Big Switch in the Netherlands

So, could this be done more easily? The answer is yes. For people like me who don’t want to spend time comparing different energy rates, there is a convenient solution: the Energy Collective. This is our Netherlands equivalent of The Big Switch, based on the joint purchase of energy.

With our Energy Collective, you can register for free and then the auction begins. I could follow the auction online to see what companies were offering, and then I was given a personal offer after the auction, tailored to my energy consumption. If I decided to switch, the new supplier would guide this process. The Energy Collective is therefore directed at a low price and the ease of switching.

It’s my kind of switch. Easy, no hassle, transparent and therefore convenient. Let the bidding begin. If the offer is good enough, I’ll make my switch!

At Consumentenbond we’ve run this scheme twice now. In May, 23,000 people switched, making an average saving of €287. Because it was so popular we ran it again in November, getting 35,000 people an average saving of €323.

In the UK, Which?’s Big Switch has had over 200,000 people sign up, and there are still a few weeks left to go. It’s exciting to think that so many people have joined. People power worked for us – I hope it can also work for you.

Which? Conversation provides guest spots to external contributors. This is from Alexy Markides, marketing manager for Consumentenbond, the Dutch Consumers Association.

Comments
Profile photo of ChrisGloucester
Member

It’s great that so many have registered an interest. I’m very hopefull something comes of it, but I’ve been thinking.
Now correct me if I’m wrong but signing up does not commit you to anything?
So when “Which” goes off to talk to energy suppliers all they really have to bargain with for a “market-leading deal” is in effect a petition. A petition saying “we want lower energy prices”.
Well, I think everyone who pays an energy bill wants that and I suspect the energy suppliers also know that too, if only by the amount of switching that goes on every day.

Now to get this “market-leading deal” what actually is it that “which” is taking to the table as an incentive to the energy suppliers to offer this deal?
Certainly not a commited list of many thousand names who will definately switch to this new deal. Rather a list of names who would like the option to change to a cheaper energy tariff. Yes well OK, but I think you could take that as read for just about every bill payer.
So given that any supplier could offer a better deal and secure many many new customers any time if they want to, what is it “which” is offering as an incentive that’s any different?

Having said all that a petition expressing depth of feeling over ever increasing energy prices and reports of ever increasing energy supplier profits is no bad thing.
It’s just that this “big switch” seems to be getting hyped into a massive collective bargaining initiative destined to achieve some “market-leading deal” wheras really it’s just a petition, one I agree with mind you, but still just a petition.
I suspect any deal or offer they come up with is likely to be already matched somewhere, perhaps with one of the smaller suppliers like Utility Warehouse or OVO.

I still really hope some good comes of it, but lets see what happens?

Member
Mr Frisbee says:
14 March 2012

Chris, I think you miss the point. The energy companies are keen (even desperate) to get a validated list of people who are prepared to act (which those who sign up to the Big Switch clearly are prepared to at least try). Also, as a collective group, even if only 5% of the 200,000 people bother to act that is 10,000 people each spending an average of about £1,000 – £10m well that is a reasonable pool to offer a better than average deal to – makes us like a large (but not sure how large) business rather than an individual household. In the Netherlands they got well over double this number and then almost 4 times the second round. Well worth something special – also, you can be sure that if the deal or service is not good then Which? will come down on them like a ton of bricks. They also are happy to pay perhaps £40 to lead generation companies for people who are looking to switch too – so it saves them a small fortune (in this case it could be as much as

Profile photo of ChrisGloucester
Member

Mr Frisbee,
Am I missing the point?
Although your comment has an element of plausibility it sounds all a bit over optimistic to me.
Like I said before I really hope some good comes of this initiative but I’m clearly not as optimistic about it as you and I think the hype will culminate in something of a disappointment.
If fact my only real criticism of this initiative is the increasingly hyped naive expectation, I’m fully in agreement with the objective.
Let’s see what happens, then we’ll see won’t we?

Member
Maikel Dewdath says:
14 March 2012

All,

My brother (member of consumentenbond) have to told me that he could get a price reduction once they all jointed together and demand a lower price deal.
Please go ahead with the proposed idea.
Maikel

Member
gill newlove says:
14 March 2012

lets face it we all want cheaper energy .so why do energy prices differ so much they all need to make a profit to keep shareholders happy .is their not a few companys out there that would reduce their prices and get more customers joining hence more profit with more customers out there becouse more customers means more profit .

Member
Navcam says:
14 March 2012

Why do suppliers never take the oppertunity to inform existing customers of best deals when renewing old ones or advising them of cheaper deals more suited to their needs ??? This would promote loyalty & customer satisfaction & referal for new customers based on honesty & genuine interest in customer continuance with them!!!

Member

I’m very interesting in the Big Switch and so have signed up for it.

However my existing NPower contract expires 31 March, following which I will be on default rates. What should I do? Wait for Big Switch to find me a deal and stomach the default charge meanwhile OR do my own deal and join Big Switch next year?

It would be useful to see the a schedule for how Big Switch is meant to proceed – or is that commercially sensitive?

Member
Alan B says:
15 March 2012

My old fuel contract expired on 29 Feb and I have transferred onto the “best” tarriff with my existing supplier [British Gas] as an intrerim measure. However, this was worse than the tariff that just expired – why am I NOT surprised at this?

I have also signed up for the big switch and will review my provider when Which have a deal available. There will be a 28 day switch delay with my current supplier [“page 99” of the small print] but this should not be a problem.

I am prepared to wait for Which to act in such a way that gets me the best deal – even if it takes a while – because their action is the only way I see pressure being brought to reduce prices and increase competition. The government seem long on words and short on action!
Give Which your full support – you have nothing to lose …

Member
lynne7 says:
15 March 2012

My contract with Scottish Power expires at the end of March. If I sign up to another contract with them with better rates than I will be on from April, I will have to pay a termination fee, so I am prepared to wait for Which to act in the hope it will only be a couple of months at the most before they come back with answers. I am so fed up with the power companies telling us to save power by switching off lights, lagging roof space, turning down thermostats, etc, etc. When you’ve done all that and your bills still increase…where do you go?

Profile photo of kawau
Member

Large scale acceptance by the public of energy tracker tariffs could help boost new competition into the UK energy retail market. Without this the Big Six are likely to remain dominant as a big balance sheet is required due to need to own upstream assets and/or purchase commodity on forward contracts to smooth tariff changes. Historical take-up of energy tracker tariffs has been very low leading to their cancellation. I am interested in what the results of this approach will be. My guess is the “Big” Switch will be limited in its impact (particulalrly for those that have already moved to a different supplier in the past).

Member
libby says:
17 March 2012

what which is trying to do is dictate to the suppliers rather than having them dictate to us, if they get enough customers together via petition its to put forward to each supplier and ask what can u do? what would u do if you were being offered over 200k customers on a plate, would u decrease your prices at fixed rate and take on this extra custom or tell them to go jump and keep ur prices the same as others? the goverment is to blame under tory they are simply that greedy they wont step in knowing that the most of the country is freezing to death because they make that much on the VAT, to busy bragging about profit and expecting a pat on the back for gettin this country out of debt, if it is in so much debt why send money to help out other countries when our own people are starving to death not just with cold but with growing fuel and food costs, a wonderful solution to this whole mess would be to get the tories out but ill start with this petition for now!!!
i am on low income having been paid off from work and im putting on average £32 pw into a pre pay meter which doesnt even last a full week, i have a fully insulated 2 bed house, im out more than i am in yet this is taking more than half my weekly income leaving me to suffer in other departments like going without food for a few days, it comes to something in this modern day where you find yourself in a position to either keep warm or eat, either way ur starving!!!

Profile photo of kawau
Member

Useful graphic and discussion from SSE:
http://www.sse.com/PriceTracker/

Member
RAY, EAST YORKS says:
19 March 2012

I have registered for the Big Switch and feel it is a great idea. However my present contract expires at the end of this month. Can you advise me what to do until your negotiations have taken place?

Member
Hari says:
19 March 2012

Here’s our cartoon, first published in our Guardian strip:
http://www.blog.rippedoffbritons.com/2011/10/energy-bills-taking-nations-temperature.html

Profile photo of Pete Moorey
Member

Thanks for all the comments. I just wanted to respond to Martin and Ray who asked about whether they should sign onto a new fixed contract deal or get moved onto their suppliers default tariff and wait to see what the outcome of the Big Switch will be.

If you would like to support The Big Switch then you could stay on the Standard tariff (which your supplier will automatically move you onto) for a few weeks while Which? negotiates and runs the reverse auction.

The auction is due to run in late April and Which? will be contacting you with your personalised savings estimate in early May.

If you wish to switch to another tariff or supplier instead, then these may come with an exit fee that would need to be taken into account. You may also be obliged to stay on your new deal for a minimum of 28 days which may mean that you miss out on The Big Switch offer.

Which? has no concrete plans to run another Big Switch until we can see the results of this one so your support is greatly appreciated.

Profile photo of kawau
Member

Mr Moorey, I would be interested to hear your response to SSE’s Letter to Which? outlining SSE’s position on ‘The Big Switch’ (http://www.sse.com/PressReleases2012/SSEPositionTheBigSwitch/). It seems to make some valid points which prevent it from entering your auction as currently designed.

Profile photo of ChrisGloucester
Member

Kawau,
I read the SSE response giving their reasons for declining to participate and you are correct, some very vaid points are made. It’s starting to look to me like if any supplier offers a “market leading deal” to those who sign up to the “Which big switch” it could well be at the expense of other customers. Hardly what “which” was after I’m sure?
I think there is a strong possibility that there will be more letters written in a similar vane from other energy suppliers.
I was hopeful that something would have come from this “which” initiative, we all want lower and fairer bills. However I somehow thought it was a bit too good to be true and I’m becoming even more sure it’s not going to achieve much as time goes by.
But let’s see how it all finally pans out, I’d really like to be wrong.

Could be at the end of the day everyones best option is to become a serial switcher to get the best deal even if that best deal is the best of a bad job.

I still favour re-nationalising the whole lot and influence energy costs at the ballot box, privatisation has not worked.

Profile photo of kawau
Member

Centrica (British Gas) follow SSE and drop out of participating (for similar reasons): http://www.centrica.com/index.asp?pageid=1041&newsid=2418
So that is the 2 largest players in the market (accounting for c50% of domestic consumption) not participating as auction design breaks requirements for non-discrimination, fewer tariffs etc. Centrica also ask Which? to be more trnasparent on how much money they will make (fee income for each switcher).

Profile photo of Nikki Whiteman
Member

HI kawau – you raise some interesting points!

We think it’s a real shame that these companies don’t want to take part. Many of the larger organisations talk about putting their customers’ interests first, so it’s really disappointing when they don’t make an effort to engage, particularly when it’s had such overwhelming interest from consumers.

We’ve always been transparent about charging a fee for switching, and we mention it on our FAQs page on the website – we’re a not-for-profit but we do need to cover our costs on this as it’s a huge operation and one we’ve invested a lot of money in (e.g. IT infrastructure to handle the sheer numbers!). If you need more detail, we anticipate the fee will be £40 – pretty reasonable when you consider the costs of other forms of marketing such as face-to-face selling. We’re not sure if fees received will cover our costs, but you can be sure that if there’s anything left over it will go back into campaigning for all UK consumers.

It would be a real shame if more companies pulled out for the reasons you state – at the end of the day we’re looking to get a great deal for a group of consumers. We’re not encouraging suppliers to put on ‘loss-leading’ deals at the expense of current customers. In fact, at the moment it’s existing customers that lose out, with the suppliers leaving the majority of them on ‘standard’ tariffs (the most expensive ones).

The reason The Big Switch is exciting is because we want to understand what is the absolute best deal that the market can offer, and then get as many people to switch to it as possible. In exchange for this market-leading deal, we’re offering a huge number of new customers – worth a lot to the energy companies if they can tempt them with a market-leading offer. Let’s hope that the other suppliers see the potential to offer a great deal and show that they’re willing to make an effort on behalf of their customers.

Profile photo of frugal ways
Member

Nikki,
I think everyone agrees that something has to be done about energy prices, but is this the way to go about it?
I think your £40 fee per switch is excessive (waits for the outcry). The marketing estimates are around 10% of traffic should convert to a sale, this would result in 26,000 switches, paying which? over a million pounds in commission/fees.
I have asked via twitter why your partners in the big switch scheme are charging a £2 fee per switch and your fee is £40?
The question wasn’t answered and I was later referred to this conversation and your response, which also does not answer the question.

I do not view a £40 fee per switch as reasonable, for energy companies, that could pay for almost 6 hours work by a telesales/doorstep worker. It is not just this scheme that inflates bills for customers, I view comparison websites as unneccesary “middle men” that are pushing up people’s bills, in the same way as various government policies are doing.
This is the reason why so many of them have set up their status to prevent the public seeing exactly how much money they are making at bill payer’s expense, via their accounts.
This also results in non transparent billing for customers, which you campaign against, try asking an energy company how much they paid out in commission in the last financial year and spread out over customers of that company’s bills, even with your voice you’ll still be refused the information.
If costs of energy are rising as we are told and bills accurately reflect the units of energy in each home being used via the meter, then how do energy companies explain all the commission fees they are paying out when they are hitting record profits?
It doesn’t add up.
Energy companies won’t tell the public, which is why there is simply no trust with them, another thing which? campaigns on.

If for example, Eon are the company that you go with for the big switch, who do you think will pay for the £1 Million or so fees that have to be paid out?
Shareholders of Eon?
Taxpayers via government coffers?
I would wager none of these, instead the burden will fall on customers of the company in the form of higher bills, which is exactly the opposite of what you are aiming for.
You are not encouraging loss-leading deals at the expense of existing customers but this is exactly what will happen.

So what else can be done?
I find it staggering that consumer bodies and so called “experts” say nothing at all about the complete lack of regulation and enforcement in the energy industry.
One only has to look at the ONS figures from 2005 onwards to see where energy prices started to rise dramatically and have continued ever since.
This coincides with “advisory” regulation being adopted via the Hampton report which was released in March of 2005.

Only last month we had edf energy being fined just £1 – making a £4.5 million donation to be split between CAB and vulnerable customers in the form of insulation.
What Ofgem and Edf didn’t mention was that under the energy obligation, energy companies are allowed to charge a certain amount for insulation – which creates a floor limit for everyone on prices of insulation, are energy companies negotiating for cheaper insulation costs and passing them on to customers? Or are any savings being passed on to shareholders in the form of profits?
Also not mentioned was how they can increase profits despite the £4.5 million “donation” – which shows that this will be paid for by all their customers.

In return for this donation – edf kept their “compliant” status with the regulator OFGEM (a question OFGEM continue to ignore via public forums/media), which means they keep the benefits of that status, in the form of no inspections without good reason, only having to provide limited information to enforcement officers, self declarations, etc.
EDF were awarded a £13 Million government contract just weeks after this announcement.
EDF have also been mentioned in the media as regards pulling out of providing future nuclear provisions, again at a cost to the taxpayer.
Others have posted here, that an energy company could generate more profits if they lowered the amount made per customer, through lowering prices and increasing customer numbers.
A similar scenario exists on public transport, with less users subsidising the empty seats by paying higher prices, if the prices were lowered, more people would use the service and generate more profit for the company. The profit made per customer could then be reduced, bringing prices down still further.

As all taxpayers have seen and are now paying for, this same “advisory” regulation completely failed in the banking sector, RBS alone took £45 Billion from taxpayer’s pockets, what makes anyone think that this same style of regulation would work for customers in the energy sector?
It is with complete bewilderment as to why consumer bodies have nothing at all to say on the matter?
More “needs of the business” regulation is being proposed as I post, under the guise of saving money, less inspection regulation is the aim. How this can be promoted as saving money when we have banking bailouts and “quantitive easing” costs to pay back, because of this “needs of the business” regulation, it’s a joke!

Regulators/enforcement bodies/consumer bodies are saying nothing about it and will not use their collective voices to oppose or register concerns in the public domain/media, which can only mean one thing… not only is big business influencing government policies, it is also determining regulation policy and may or may not be indirectly, funding the regulators/enforcement/consumer bodies as is the case with the Energy Saving Trust.

Addressing problems with regulation and enforcement is the only way that I personally can see any way forward to improving genuine competition, clearer billing and cheaper/more stable prices for our energy use.
Every other way suggested in recent years, including the big switch, puts the burden back on to customers via their bills and defeats the whole object of what is trying to be achieved.

Member
Peter Purnell says:
2 April 2012

I see in the papers that some energy companies say that they will not agree to take part in the Which? reverse auction. This includes my supplier Southern Electric/Scottish Power,so I intend to email them stating that I will switch away from them “on principle” if they do not change their position. I would recommend others who have signed up to the Which? capaign to exert pressure by doing the same.

Profile photo of ChrisGloucester
Member

Peter Purnell,
I share your sentiment, however I doubt your letter or even several thousand like it will make any difference. Southern Electric/Scottish are only the first to reject the “big switch”. They have more recently been joined by British Gas and I’ve a feeling this is unfortunately the way it’s going to go.
A pity but by now we really should all know just what sort of people we’re dealing with when it comes to energy suppiers.

I think we should ditch the “big switch”, now joined by the “hugh switch” I can’t see anything resulting from either of them, and start an initiative to get the whole greedy lot re-nationalised.
We can then infulence energy prices at the ballot box and won’t have to line the pockets of shareholders.

Privatised energy supply has not worked.

Profile photo of b martin
Member

To Alexy Merkides et al at Which
Can we have a progress report on the big switch campaign by the end of the month ?

Profile photo of Nikki Whiteman
Member

Hi b.martin – you can keep up to date with our progress at http://www.whichbigswitch.co.uk – we also give regular updates on it via our news section – http://www.which.co.uk/news and also via our Twitter and facebook feeds. http://www.twitter.com/whichaction and http://www.facebook.com/whichaction

We’ll be reporting on progress as and when it happens, so don’t worry – there’ll be plenty more updates as we move towards the final deal! Have you signed up? Those who have will get email updates when the deal is decided, but if you haven’t signed up we’ll be telling people the results on which.co.uk and here on Conversation. Hope this helps!

Profile photo of b martin
Member

To Nikki Whiteman
Thank for your quick reply.I see that so far only the Co-op and EON have agreed to participate, have they offered their new charges for each of the 14 regions in the UK ?
I would also ask you to confine all news on the Big Switch to one page, say this one, so that people will know where to look instead of waisting time hunting through a number of sites full of unrelated matters.

Profile photo of Nikki Whiteman
Member

Hi b.martin – I’m afraid I can’t promise not to put the news elsewhere – Which? has a very large audience to communicate to, and we need to make sure that we tell our supporters and members on all the possible channels.

But don’t worry – we’ll add an update in the comments here as well when the final deal has been secured. I’m afraid I can’t answer your question on deals yet, as we’re not yet at the stage where the companies have made offers. But as I say, we’ll keep you updated as and when things happen. In the meantime, we’ve got answers to common questions over on the FAQs page, which I think covers pretty much everything! http://www.whichbigswitch.co.uk

Profile photo of Shire of rose
Member

Some energy company may take advantage of which Award given by which. If they are no longer customer friendly or pricewise, their award should be taken away by which. They may be very good in that particular year. If anyone see WHICH AWARD logo on their website, People find confidence that their product is very good.
We hope that big switch will give good example to many consumers and it will be biggest media story . Good Luck.

Profile photo of william
Member

I wonder how the Dutch group coped with getting people without internet access to sign up ?

Member
Anthony says:
13 May 2015

Q If I subscribe to this organisation what security do I have I.e.
Bank account details- In the event of financial failure who picks up the bill
I note that the company is Offshore