Energy customer switches increase by fifth in Ofgem trial

The regulator ran the trial between February and April this year, sending letters to around 50,000 “disengaged” customers – people who had typically been on the same variable tariff for six years with one of the big six suppliers – advising them how much they could save by switching suppliers.

The scheme was based on the idea of "collective" switching, where a group of consumers swap supplier in one go.

Although four in five did not switch, Ofgem said the trial was a success. In all, 22 percent of customers who received the communications advising them of the benefit of switching followed through, significantly more than the 2.6 percent in the control group who received no information about switching.

Customers switching, who were “often loyal and elderly”, generally contacted price comparison service Energyhelpline, which negotiated collective switching deals.

Ofgem argued that unlike other collective switches, customers did not have to provide complicated information about their existing tariff to see a personalised savings calculation, making it easier to start a switch.

Of those who switched, 71 percent dealt with Energyhelpline on the phone, something the regulator said illustrates how many people customers might not be comfortable using the online route generally advertised as the way to switch.

Half moved onto the collectively negotiated tariff, which Ofgem said would save them £261 a year.

The other half of switchers moved onto other deals listed by Energyhelpline, a better deal from their existing supplier, or a deal they have found themselves – with an average saving overall of £298 a year.

Rob Salter-Church, Ofgem’s interim executive director for consumers and markets, said: “Many customers on poor value default deals rarely switch because they think it’s too much hassle, or might not realise how much they can save.

“The results of this trial demonstrate that offering a simplified collective switch and providing personalised savings can be a big help in giving these customers the confidence and reassurance they need to start a switch.”