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Energy switchers hit six-year high amid spring price hikes

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Some 7.7 million gas or electricity switches took place in 2016, according to new data from Ofgem. This is 1.7 million more switches than the previous year, a rise of 28%.

This means switching rates last year reached their highest level since 2010, at around 15.8% across all gas and electricity customers. Nearly half (47%) of the switches were to small or medium suppliers.

In recent weeks some suppliers have announced price rises for customers on standard variable tariffs, which are typically more expensive than fixed deals. On Friday, First Utility blamed wholesale energy prices and the cost of obligations such as the smart meter programme for an average 9.7% increase in typical dual fuel bills for its customers. Earlier in the month Npower, EDF and Scottish Power announced price rises of 9.8%, 1.2% and 7.8 % respectively, while British Gas said it would freeze prices until August.

Alex Neill, ​Which?’s managing director of home services, said: ”While it’s good to see an increase in switching, this does not hide the fact that millions of hard pressed customers continue to suffer due to a lack of competition in this market.
“After another round of inflation busting price hikes, far too many are still stuck on expensive standard tariffs and energy firms should be doing much more to properly engage with their customers.”

Ofgem’s data tracks the annual switching trends across the whole of Great Britain’s domestic retail energy market. 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 prepayment 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.”

Related content:

Energy suppliers: do they need more oversight?

Will new auto-switch services change the game for energy customers?

Energy retailers: How are they changing?

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