Energy Switching fell to lowest level since 2018 in January but Energy Price Cap hike likely to spur a rebound

Why the decline?

Large supplier to smaller supplier switches still highest

In terms of the type of change of supplier, all categories were down substantially on the preceding month bar one. Switching between small and medium-sized energy supply companies increased when compared year on year.

• Large to large switches numbered 172,000 – a decline of 20% when compared to January 2020 and comprised 46% of the total switches recorded in January 2021.
• Large to smaller supplier switches numbered 104,000- a decline of 9% when compared to January 2020 and made up 27% of the total switches in January 2021.
• Smaller to Large switches numbered 56,000- a decline of 25% when compared to January 2020 and made up 15% of the total switches in January 2021.
• Small to Small switches numbered 46,000- a 7% increase when compared to January 2020 and made up 12% of the total switches in January 2021.

Also read: Ofgem Hikes Energy Price Cap raising Energy Bills to pre-pandemic levels

Price Cap rise likely to increase switches

The number of consumers switching their energy supplier is likely to rebound in the next few months following Ofgem’s announcement that it was hiking the standard variable tariff price cap.

The move will see consumer paying up to £96 more on average for their energy bills from April and following British Gas’ announcement that it would be raising prices to the maximum limit more energy suppliers are expected to follow suit.

Also read: British Gas becomes the first large energy supplier to hike prices after price cap increase, others expected to follow

Attract new customers

With the price cap rise approaching and with more energy suppliers expected to announce price hikes over the coming weeks, smaller energy suppliers have an opportunity to snap up new customers.

Their ability to offer cheaper tariffs and provide excellent customer service should see consumers looking for the best deals to make the jump away from the dominant larger suppliers.

We could see a surge in the number of consumers switching to cheaper, smaller alternatives but only if challenger suppliers hammer home the message that they can offer a better deal.

Read our tips on how to attract new customers to a smaller energy supplier HERE.

Further Reading

Government unveils new strategy to protect vulnerable consumers and reduce energy bills, what does this mean for energy suppliers?

How to convince consumers to switch to a smaller energy supplier

Smaller Energy Suppliers continued to snap up market share in 2020 shows new report

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