The number of households switching energy deals is at record levels, but energy customers are warned not to fall into the “price cap trap.”
The number of energy customers switching providers reached record levels last year according to energy industry body Energy UK.
5.8 million customers switched deals last year, a record high. In December alone switching figures were up 10% on 2017.
Of those switches in December 2018, nearly 100,000 were to a small or mid-tier energy supplier.
Lawrence Slade, chief executive of Energy UK, comments: “It is positive to see such high levels of energy switching - particularly when compared to other sectors – with one in five customers switching supplier in 2018.
“My hope remains that, with the recent introduction of the price cap, we don’t see this element of competition undermined and switching levels fall, as is predicted in Ofgem’s impact assessment.”
But Richard Neudegg, head of regulation at price comparison site uSwitch is less positive about the price cap: “We’re so close to a tipping point where the majority of energy customers won’t be on poor value standard variable tariffs, which will put more pressure on suppliers to up their game.
“In 2019, it’s vital that consumers don’t fall into the price cap trap by thinking they will no longer suffer price rises on standard tariffs.
“This is especially true as Ofgem is expected to announce an increase the level of the price cap in a few weeks’ time - which means the cost of standard tariffs is likely to go up, affecting over half the households in Britain.”
Get a better deal
It is vital to shop around for a good fixed-cost tariff for your energy needs. Failing to do so can cost you hundreds of pounds a year. Relying on the government’s price cap for better prices will only help to an extent.
Mr Slade adds: “With winter in full swing, I urge everyone to get in touch with their supplier or have a look online to make sure they are on the best energy tariff for them, whether that be on price, service or green considerations.
The best way for households to look for a better deal is on price comparison sites. Tariffs online tend to be better than what you will find calling up suppliers on the phone.
It is also possible to haggle a better deal with your existing provider, but it is best to do this in the knowledge of what you could get elsewhere.
Finally, Mr Slade says: “More importantly, as the temperature falls, consumers should ensure their house is energy efficient - for example checking that it is well insulated - which is the best way to keep energy bills down in the long run.”
Check Moneywise's guide to unusual energy-saving tips for your home for more.