In 2012 Which? and 38 Degrees launched the UK’s first and largest collective energy switch. With 145,000 people taking part, this provided a unique opportunity to analyse real life switching decisions.
At the Centre for Competition Policy – part of the University of East Anglia – we were able to analyse the wealth of data collected from The Big Switch, as well as carrying out a series of follow-up questionnaires with participants. Our aim was to get a better understanding of the factors influencing consumers’ decisions to switch energy supplier.
If you responded to one of these surveys, we want to thank you for taking part – without you the research wouldn’t have been possible.
Reasons for switching energy suppliers
We know that the potential savings are an important factor for switching, and there was a substantial average saving of £120 available to participants of The Big Switch. In total, a quarter of the people who could have saved decided to switch, collectively saving an impressive £5.5m. But this does also suggest that people’s energy switching decisions can be influenced by other factors, even where there’s money to be saved.
After getting energy suppliers to compete, the Big Switch offered the best deal on the market for the majority of the UK. However, in some cases the deal wasn’t the cheapest for particular participants. To make sure everyone saw the cheapest deal for them, Which? showed the cheapest deal in their area alongside The Big Switch offer. But displaying two offers seems to have deterred people from switching rather than spurring them on. This is a particularly interesting result; does comparing more offers make you feel informed or are too many options overwhelming?
We also found that the length of time it took actual switchers to complete the switching process was generally less than the length of time non-switchers expected the process would take. This suggests a perceived hassle factor, which puts people off switching their energy supplier.
Why do you switch?
Other reasons for people switching included: using accurate energy consumption information from their bills to generate a quote, rather than just estimating it; taking part with the aim of saving money rather than just out of curiosity; and preferring the ethical or environmental stance of the new supplier.
Choosing not to switch was associated with relying on an estimate of your energy bill; facing an exit fee when leaving an energy company; and being busy during the period of The Big Switch.
Do any of the above factors fit with your experiences of switching energy suppliers? Do you find the amount of choice overwhelming or are you confident navigating the options? Is saving money the main driver for you to consider switching?
Once again we would like to thank those of you who took part in this exercise and provided survey responses. If you’d like to see the full analysis, you can download the technical report here.
This is a guest post by David Deller at the Centre for Competition Policy – part of the University of East Anglia. All opinions are David’s own, not necessarily those of Which?