Energy Switching UP
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The BBC, et al, are reporting a 15% increase in domestic energy switching last year. Sadly, OFGEM uses the statistics light a drunken man uses a lamp-post - for support not illumination.
I switched suppliers 4 times in 2015 so I assume that this equates to 8 switches in the overall total. A more interesting - and more meaningful - statistic would be 'what is the number/% of domestic consumers who switched for the first time in 2015'? Sadly, this might reveal more than OFGEM would like us to know.
I switched suppliers 4 times in 2015 so I assume that this equates to 8 switches in the overall total. A more interesting - and more meaningful - statistic would be 'what is the number/% of domestic consumers who switched for the first time in 2015'? Sadly, this might reveal more than OFGEM would like us to know.
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It could be that they are drip feeding the reductions as much as possible. When someone switches on to a cheap "1 year fix" deal, they (the majority of people) will think that their switch is done for a year and will not check for further and much larger price drops. Basically the utility companies are spreading out any reductions as much as possible.
I guess this will all change when prices go up however!
Yes, the figures you refer to are "that 6.1 million domestic energy supply accounts were switched in 2015, an increase of 15% compared with 2014, and the highest number of switches since 2011."
BBC Moneybox reported as recently as 31-Jan-2016 (you can still find it on iPlayer) that the number of customers that have switched in the last 5 years has fallen by 50%. Only 1 in 10 customers have actually switched supplier in the last year.
(and their are only about 35 million customers)
The reasons appear logical:
1. When the average customer switches for the first time, they will typically save about £250 p.a. (as most will be switching from a suppliers standard tariff). But once they have done the first switch, the real savings possible in subsequent years reduce to about £50 p.a. maximum (and maybe less)
2. Having switched to the best supplier, if a customer were to stay with that supplier the following year (opting for the best available tariff for them) then the small possible savings (if any) by switching supplier usually make this unappealing.
PPM customers, for example, where there is little choice of tariffs with a supplier will mean those customers are probably best off with the supplier they chose the last time.
3. Some people are confused by savings figures suggested. They may see again a £250 saving by switching that they never see materialise in their pocket. This is because they confuse actual savings with savings they could achieve based on doing nothing. i.e. if the cost of their energy were to increase by £250 if they do nothing, and see a possible saving of £250, then the net result of switching is they still carry on paying the same per month and wonder why they bothered, so don't bother again.
(This was actually an MSE Martin explanation)
Are you sure it was 31 January 2016?
31 January 2016 was actually a Sunday, so the programme would have been first broadcast on 30 January 2016, and I can't find anything to do with energy switching sites on that programme.
But I can find some reference in the programme first broadcast 31 January 2015.
http://www.bbc.co.uk/programmes/b050rz2w
However, I've switched E.On tariffs twice in 3 months, and currently switching again within E.On.
So, as you say, the stats can be manipulated to suggest a much higher level of tariff mobility than is actually the case.
For me, the key factor should be the percentage of customers still on Standard tariff, who can mostly be assumed to have never switched.
In 22 months I've had 3 suppliers but 8 different tariffs !!
As I understand it, Ofgem have given figures for switching supplier per account; gas & electricity are usually considered separate accounts even if you are on a dual fuel tariff.
Transfers of tariff (i.e. staying with the same supplier) are not included ... except possibly when you have done this through a third party (e.g. a comparison site for a collective switch)
But that is only my interpretation and could well be wrong.
If my interpretation is correct, then Ofgem would have probably handled that as 10 account switches
(That's assuming the 2nd Ovo tariff was actioned as a transfer of tariff from the first Ovo tariff, not involving any 3rd party)
The actual Ofgen report makes no mention of "how much the general public have "saved" by switching. "
The only mention of savings is:
You cannot extrapolate that to brewerdave's situation as he is far from typical of most consumers.