Energy switching on the up, but millions still missing out on big savings
The number of people who switched energy provider between January and March rose by 8% compared to the same period last year. But millions of people are yet to reap the rewards from switching away from standard tariffs, which are usually the most expensive on the market.
New data from energy regulator Ofgem reveals that 855,599 gas customers switched tariffs in the first three months of the year, while 1,090,531 electricity customers switched tariffs.
Of those who switched, 52% went to independent suppliers - there are now almost 40 independent suppliers in the energy market, making up 13% and 14% of the electricity and gas market respectively, according to Ofgem.
But many people are still missing out on savings of over £300 by not switching. The average standard variable tariff of the larger energy suppliers was £1,069 on 21 April; yet the cheapest tariff available on that date - a one-year fixed tariff - was £744, according to Ofgem.
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Rachel Fletcher, Ofgem senior partner of consumers and competition, says: “It’s encouraging to see a continued rise in the number of people switching, and an increasing number of suppliers entering the market. There has never been a better time to switch suppliers and you could save up to £325 according to our latest figures.”
However, Ofgem is concerned that prepayment customers are losing out because most of the best deals are only possible if they change meters.
Competition watchdog, the Competition and Markets Authority (CMA), has recently proposed a transitional price control to help improve the situation for prepayment customers. Its final report is due out in June.
Ms Fletcher adds: “We are very concerned that the data we have published today shows that suppliers are still not offering people with prepayment meters the much cheaper fixed deals available to other customers. Many prepayment customers are vulnerable and it concerns us that they are losing out.
“The CMA’s proposed prepayment tariff and other measures we are taking would improve this situation, and we are considering whether further action is needed."