Have you switched energy suppliers yet?

Consumer editor Lindsay Blair looks at how the latest watchdog report could help you save money by switching energy suppliers

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With every passing day, there’s a new news story about energy suppliers dropping gas prices, complaints about poor customer service, job losses and how much money you could be saving if you switched energy suppliers. In a bid to reform the energy market, which has been deemed lacking in competition and criticised for not making it clear where money can be saved, the Competitions and Markets Authority (CMA) has set out proposals to open up the market and help get customers a better deal.

Latest findings, published 10 March 2016, show that 70 per cent of domestic customers are still on expensive standard tariffs, missing out on a saving of up to £300 per year if they switched to a cheaper deal. So, to help encourage a greater level of switching to more competitively priced plans and following an 18-month investigation into how the energy market works, the CMA has outlined a number of proposals to improve services for consumers:

– An Ofgem-controlled database of customers who have been on a Standard Variable Tariff for more than three years, allowing rival energy suppliers to target these customers with a better deal. Customers can opt out of this at any time.

– Those with prepayment meters, whose cheapest tariffs are around £300 more expensive and have fewer options for alternative tariffs, should have a temporary price control safeguard to protect from overly high bills. This temporary control, until 2020, should bridge the gap between prepayment options that are currently very limited and the roll out of smart meters.

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– Take more action to alert customers to how much they could be saving.

– By encouraging increased competition between rival suppliers, the CMA hopes to put pressure on energy providers to improve customer service.

– Allow the 700,000 households on non-Economy 7 restricted meters to switch to cheaper single-rate tariffs without requiring a meter replacement.

– End restriction of suppliers to offer just four tariffs, giving customers more options.

– Tackle ‘rollover contracts’ where customers are automatically put on more expensive tariffs after an offer period has ended by highlighting other deals available.

What the expert say…

 

‘We have found that the six largest suppliers have learned to take many of their existing domestic customers – some 70 per cent of whom are on ‘default’ standard variable tariffs – for granted, not just over prices, but with their service and quality…but elsewhere customers are benefiting to the tune of hundreds of pounds a year by switching. We’re proposing a wide range of bold, innovative measures to enable competition to grow further across the market so that millions more households will benefit.’Roger Witcomb, chairman of the energy market investigation

‘The regulator must make sure that releasing customer data to rival suppliers is done so that it genuinely helps people switch from the most expensive tariffs to better deals, rather than result in more unwanted nuisance calls. With the cost to consumers of an uncompetitive market now standing at £1.7 billion, we want all the energy suppliers to stop resisting change and start working harder to restore trust in their industry.’

‘Switching rates are a strong indicator of competition and so targets should be set to monitor those changing supplier, tariff and comparing deals as the reforms are put in place. In the meantime, the fastest and most effective way for consumers to save on their bills is by switching provider. Rather than waiting for long-awaited reforms to take effect, the average consumer could cut annual bills by a staggering £340, simply by switching now to a better deal.’

Find out how much Lindsay saved by switching her energy supplier and discover how you could benefit too