Switching slow down
The number of customers changing suppliers is falling significantly, according to Energy UK’s latest electricity switching figures for September and October.
Last month 434,000 customers switched supplier – a 27% fall compared to October 2020 and well below the five-year average figure of 608,000 for what is usually the busiest month of the year.
In September, 471,000 customers switched supplier – a 4% decrease compared to August last year. So far this year nearly 4.7 million customers have changed supplier, a 5% decrease compared to the equivalent period in 2020.
The current turbulence in the retail market means that currently the cheapest deals are those covered by the price cap – a reversal of the normal situation where fixed- term tariffs had offered the best value. Switching is therefore likely to continue to fall over the next few months as customers are advised to stay on default tariffs in the absence of cheaper deals elsewhere.
These figures record completed switches so October’s figures will include switches started in the previous month. As a result, we may not see the full effect of the present disruption until November’s figures are published.
With a number of (mostly) smaller suppliers leaving the market in recent weeks, the figures also reveal that - for the first time since 2012 – bigger suppliers are now gaining customers from small and medium suppliers.
These figures do not include customers transferred as part of the Supplier of Last Resort (SOLR) process, activated when a supplier goes out of business.
Matthew Cole, Independent Chairman of Energy UK’s Energy Switch Guarantee, (a voluntary industry initiative under which signatory suppliers commit to making switching simple, and safe for customers, said:
“It’s no surprise to see switching numbers falling given the current situation – for many customers the usual motivation for switching isn’t there right now. Towards the end of September, fixed deals overtook the cost of default tariffs, and some price comparison websites temporarily withdrew their services, but we won’t see the full picture until November’s figures are published.
“There is going to be more disruption over the winter but once we are through this and back to a more stable situation, there will still be an important role for switching – albeit in a market where price is no longer the only consideration and other factors like service quality and innovative new, tailored, products attract customers.
“The nature of the future retail market means that we shouldn’t expect the same quantity of switching but the quality will remain important so that customers still have the confidence to check that their tariff is the right one for them, and to switch if another deal or supplier is more suitable for their needs.”
Notes to editors:
- To see the latest monthly switching stats, please visit Energy UK’s website.
- From December 2020, larger suppliers in the market are British Gas, Bulb, EDF Energy, E.ON (including npower), Octopus Energy, OVO (including domestic business of SSE) and Scottish Power. This is based on Ofgem’s revised definition of classifying all suppliers with a market share of 5% or above in either fuel as larger.
- Gemserv Limited is the service company contracted by the MRA Service Company (MRASCo) to provide services in support of the MRA including the management of its governance and providing specialised expertise to MRASCo in support of the growing electricity retail market.
- The data referenced in these reports is for electricity only. These figures include both domestic (Profile Classes 1 and 2) and non-domestic customers (Profile Classes 3-8 and 0) but do not include customers transferred to another supplier as a result of the Supplier of Last Resort process (SOLR). Also, any switches between merged parties are considered as internal and are not counted in our switching statistics.
- These figures do not include internal electricity switching. Such statistics can be found on the Ofgem website.
- The Energy Switch Guarantee (ESG) is a set of 10 commitments – launched by Energy UK in 2016 – that makes switching simple, speedy and safe. The Guarantee covers nearly 80% of the retail energy market. Find out more on the ESG website .