The latest reports from Ofgem suggest that the year 2016 witnessed a 30% hike in the number of customers switching their energy suppliers. Switching reached a six year high as millions of customers decided to shop around and bring down their energy bills. Ofgem statistics suggest that last year around 7.7 million customers made the switch to another affordable supplier. This was 1.7 million more than 2015, an upswing of 28%, which are the highest switching rates recorded since 2010.
Furthermore, Ofgem suggested that out of the 7.7 million switches, 4.4 million were electricity switches while 3.4 million were gas switches making the ratio to 30% and 24% respectively. When dissecting the figures, it was discovered that 47% of the people switched to small or medium suppliers as they offer some of the most lucrative energy deals along with a good service. Due to the strong competition, the annual switching rate reached the highest in last five years.
The table below suggests the variation of annual switching rates:
The year 2017 witnessed a few Big Six suppliers announcing the price rise of more than or equal to 8% in their SVT. Stats suggest that if any energy customer switches to the cheapest energy deals then they can end up saving around £230 a year, which is one of the main reasons to compel energy consumers to switch. The switching process itself has become more relaxed and needs just three weeks to complete and has a 14 day cooling off period.
Ofgem’s CEO Dermot Nolan expressed his views on the positive trend of switching by saying that “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.”
“Big savings of around £230 are available and switching has never been easier, so we would urge everyone to shop around for a better deal, especially if their supplier announces a price rise.”
Shay Ramani, the founder of FreePriceCompare.com said that “The record breaking amount of switches is due to the tough competition given by small energy suppliers who leave no stone unturned to attract their customers. Moreover, the falling value of the pound also makes consumer aware about making more savings which are possible through switching. Shopping around is the best method to get cheaper deals and big savings”.
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