Retail consumers are now able to switch household gas and electricity suppliers in half the time it used to take as Britain’s Big Six respond to pressure from smaller, more agile rivals and continuing price competition.
Energy UK – the trade association which represents the Big Six (and 70 other energy suppliers) – today announces that it is now possible to change provider in 17 days – compared to five weeks.
Encouraging greater competition – and urging consumers to shop around between suppliers – is one of the UK Government’s key energy policies in combating quasi-oligopolistic pricing by large, vertically-integrated gas and electricity utility companies which have large market shares.
Lawrence Slade, Chief Executive, Energy UK, said: “Energy companies large and small, network operators and other stakeholders have worked together to bring about these major industry changes.
“These new systems allow customers to switch supplier quickly while still giving them the protection and flexibility of a two week cooling off period. This is the latest step in long line of developments the industry has made to improve customer service and competition.
“This is fantastic news and yet just another example of energy companies taking the initiative and making it easier for customers to engage with their supplier.
“There are now more companies in the market than ever before, all of whom are fighting hard for new customers. Recently we saw data showing the price of the average tariff is falling. With quicker switching it’ll be easier than ever before for households to take advantage of the deals on offer.”
Switching is the best way for customers to take control of their energy costs. New data shows that the average price of the 10 cheapest deals on offer fell by 10% during 2014. More than three million customers changed electricity supplier last year and quicker switching will make it even easier for more customers to find the best deal in the future.
Yesterday, E.On became the first of Britain’s Big Six energy suppliers to cut its standard retail gas prices by 3½% – saving customers an average of £24 a year. Market observers expect the rest of the Big Six – SSE, Scottish Power, Scottish/British Gas/ Centrica, Npower and EDF – to follow suit.
Commenting on E.On’s move to cut its standard gas price, an Ofgem spokesperson said: “This is a small step in the right direction. We have consistently called for suppliers to explain the growing gap between falling wholesale prices and retail prices.
“Cutting prices is an explanation that consumers will understand and in a competitive market we would expect others to follow suit.”