Households could benefit from the cheapest energy deals on the market, without having to lift a finger.
Price comparison site GoCompare has launched a new energy switching service that automatically transfers customers to the best energy deal, potentially saving them hundreds of pounds in bills every year.
The service, called WeFlip, will search for the best energy tariffs around and then automatically switch customers over on to the cheapest one available.
Recent figures from Ofgem highlight how millions of households are still paying too much for their energy bills.
According to the regulator, 54% of households remain on poor-value default deals, meaning over 15 million people are paying hundreds of pounds more than they need to for energy.
Meanwhile, there is as much as a £352 difference in cost between a dual fuel standard variable tariff (SVT) and the cheapest available tariff if you get your energy from one of the Big Six.
Frank Field MP, chair of the Work and Pensions Select Committee, says: “Currently, the onus is on those households to make difficult and time-consuming choices between different deals offered by suppliers, often based on confusing tariffs, amongst all the other competing demands that life throws at them.
"Hence the ease with which suppliers can continue asking them, year after year, to pay over the odds for the gas and electricity.”
He adds: “Any moves to address this injustice by helping those hard-up households who, as loyal consumers, have long been paying too much for their gas and electricity, are to be welcomed.”
How does it work?
Once you have entered your personal details and information such as how much energy you consume, WeFlip’s algorithms will match your details with the best tariff available through the service.
You start off by choosing the first deal to flip to from WeFlip’s broad selection of suppliers – which includes 63 of the current 72 on the market.
After the initial switch, WeFlip will take over and search the market, automatically switching you to a cheaper deal once there is a difference of £50, including exit fees.
Matthew Crummack, chief executive of GoCompare Group, says: “Despite a long series of industry-wide campaigns to encourage switching, progress has been painfully slow. Not least because the onus has always been on customers to take action year after year.
“Through WeFlip, we’ve removed as much hassle as possible from the process of finding and switching to better energy deals.”
"Issues of trust"
WeFlip is not the only service that aims to take the hassle out of energy switching and get you a good deal.
Other similar services on the market include Flipper, Look After My Bills, Switchd and Switchcraft.
Henry de Zoete, co-founder of auto-switching service Look After My Bills, says that while he welcomes the launch of WeFlip, there could be issues of trust.
He says: "New innovative auto-switching services that do it for you are the future of personal finance and good news for consumers. The key question for anybody doing auto-switching is trust. Price comparison sites have a chequered past to say the least.”
He adds: "More people doing and talking about auto-switching is a good thing. We've had 20 years of price comparison sites telling people to switch and still millions of people don't do it. So new innovative auto-switching services that do it for you are the future of personal finance and good news for consumers.”
Jane Lucy, chief executive of energy switching service The Labrador, says: “Fundamentally, the biggest problem with the energy market is that customers are not engaging, so anyone making switching more accessible is a good thing.
“The whole question of accuracy, however, is going to become more important. Some of the companies that are emerging are not necessarily using up-to-date technology that can collect data about households’ usage accurately.”
She adds: “When customers use the Ofgem average usage – which most competitors use as default - they can get the wrong tariff recommendation more than 50% of the time. How will price comparison websites take into account exit fees when they can't reliably know the usage data needed to generate savings that exceed exit fees?”