According to new data from OFGEM, 7.7 million gas or electricity switches took place in 2016. This is 1.7 million more switches than the previous year, a surge of 28 per cent.
In this way, switching rates last year reached their highest level since 2010, at around 15.8 per cent across gas and electricity customers.
Of these switches, nearly half (47 per cent) were to small or medium suppliers as they continued to attract growing numbers of customers.
Despite rising switching rates, however, around two-thirds of customers still remain on standard variable tariffs.
Dermot Nolan, OFGEM Chief Executive, said: “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.”
However, Ryan Thomson, a partner at specialist management consultancy Baringa, commented: “OFGEM needs to expand its competitiveness criteria and place more emphasis on what suppliers are doing to consistently reduce overall customer spend – for instance through more innovative commercial models or use of smart services
“A secure, successful energy market requires more than lots of customers switching between lots of suppliers.
“If the only way customers feel they can get a good deal is to change supplier every year then perhaps we should conclude the market is not working. Similarly, it cannot be right that the only way suppliers can make money is by charging their loyal customers more.
“We need other measures of customer engagement to really judge if the energy market is competitive and working for all.”