Energy switching powering ahead according to Ofgem

Energy switching powering ahead according to Ofgem main image

For anyone much over the age of say 40-45, the idea of constantly changing energy suppliers still seems strange. Many of us can remember when the energy suppliers were nationalised and market choice was limited to non-existent.

Whatever you think about the merits or otherwise of energy supply privatisation, for some time now it’s been relatively easy to change.  Yet surprisingly, although a recent BBC report indicates that numbers are rising, there’s still a widespread lack of awareness as to the possibilities here – and in some cases a reticence to ‘get involved’ and actually do something.

Switching energy suppliers – a quick recap

Today, the typical consumer has a wide choice of potential providers and available tariffs covering things like gas, electricity and water (with some variations in the individual home nations).

Now it’s perfectly true that in the early days of ‘freedom of choice’ in these domains, things weren’t exactly running smoothly. The processes and procedures involved in changing supplier were often chaotic, bureaucratic, slow and confusing.

To make matters worse the tariffs involved didn’t only vary between providers, which is after all the whole point, they were also incomprehensibly complex. In the early days, some cynics justifiably pointed out that you needed a supercomputer to be able to compare one set of prices against another.

Today things aren’t perfect but they are vastly improved. It really is easy to switch between providers and comparing one tariff against another is also much easier – though there’s still scope for improvement.

You can get a good overview of the principles and some helpful comparison tools on the official industry regulator’s (Ofgem) website.

What’s holding people back?

As the BBC’s report indicates though, the headline figures of account changes may look great but peel back the surface layers and the reality is slightly less pleasing.

That’s because while the headline number of supplier changes is rocketing, which is great, these figures include both people who change more than once and those changing several providers at the same time. In terms of the overall numbers of customers, more needs to be done to facilitate money-saving changes of supplier.

Traditionally, analysing this sluggish take-up of switching has involved blaming the energy providers and saying they must do more to make it easier for their customers to change - but that might be a little unfair in today’s world:

  • the reality is that it has been relatively fast (about 17 days at the time of writing – and reducing) and easy to change suppliers now for at least the past 3-5 years
  • yet today, over half of all energy supply customers have never done so.

This appears to be a question of communication and awareness not hostile or incompetent suppliers. More needs to be done to get consumers thinking about taking more ownership of their costs in this major area of expenditure for the typical household and small business budget.

Is switching energy supplier worth it?

One of the commonest misperceptions is that changing “won’t make much difference – they’re all the same”.

In fact, nothing could be further from the truth.

Even the government, often very conservative in its estimating, has published figures suggesting many people could save up to £200pa (or considerably more) by simply changing energy provider.  Over the country as a whole, that adds up to a mind-boggling £2.7billion.

Should you consider it? The answer appears to be something of a no-brainer!

Of course, it’s possible that you’re already on an unbeatable tariff but you won’t know that for sure unless you check and confirm.  All you’ll need to do that is to have some idea of your existing typical annual expenditure on things such as gas, electricity and water.

Be careful about drawing conclusions based upon just a quarterly bill, as they can vary significantly due to the weather etc.

You can then use one of the many comparison tools, as per the links given above.

Good luck and start saving money!

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