Switching of energy suppliers soars to six-year high as households face price hikes
PUBLISHED: 08:51 27 February 2017 | UPDATED: 08:51 27 February 2017
The number of households switching their energy supplier has reached a six-year high as consumers face a spate of price rises in coming months.
According to regulator Ofgem customers swapped their energy provider 7.7m times last year, a rise of 1.7m (nearly 30%) in 2015.
It comes as companies inclduing Npower, EDF and Scottish Power announced they would be ramping up bills, with many blaming rising wholesale costs.
Co-operative Energy announced last week it would increase the cost of its standard variable tariff by an average of 5%, a change that will affect around 96,000 customers when it comes in from April 1.
Earlier this month Ofgem set a temporary pre-payment price cap to protect more than 4m households least able to benefit from competition following a two-year investigation of the energy market by the Competition and Markets Authority.
Ofgem advised consumers they can make substantial savings by shopping around for energy deals, warning that standard variable tariffs are typically more expensive than fixed deals.
Despite rising switching rates, around two thirds of customers still remain on standard variable tariffs.
Of those who did switch last year, 47% were to small or medium suppliers as they continued to attract growing numbers of customers.
Ofgem’s chief executive Dermot Nolan said: “This welcome increase in switching should serve as a warning to supply companies.
“If they fail to keep prices under control or do not provide a good service, they risk being punished as customers vote with their feet.
“While today’s figures show good progress, the market is not as competitive as we would like.
“That is why we have put a temporary price cap in place to protect people on pre-payment meters who have the least access to competitive deals and why we are pursuing a raft of reforms which will make this market fairer, smarter and more competitive for consumers.”
“Big savings of around £230 are available and switching has never been easier, so we would urge everyone to shop around for a better deal, especially if their supplier announces a price rise.”
Lawrence Slade, chief executive of the industry’s trade association, Energy UK, welcomed the high numbers of people swapping their power providers.
He said: “The industry is committed to ensuring the market works for everyone and is taking action to engage with loyal customers.”