Blog Post

Number of Consumers switching Energy Supplier fell 6.5% in 2020

Richard Simmonds • Jan 27, 2021

Recently released official statistics have revealed that fewer households switched their energy supplier in 2020 than in the previous year as concerns over the covid-19 pandemic and finances took a toll.

Pandemic worries

The data shows that six million energy bill payers opted to switch their energy supplier in 2020, a 6.5% drop from the record 6.4 million switches recorded in 2019.

Analysts believe that the leading causes for the drop off in switching were heightened concerns over the pandemic and the financial impacts created by the lockdowns. 

Before the first lockdown, it had been forecast that more households would likely switch supplier due to having more free time due to many people being furloughed and assessing their financial situation.

Instead, consumers opted for the better the devil you know approach in these uncertain times with the final month of 2020 seeing a 10% decline on the number of switches.

While the number of switches was down in 2019 the 6 million figure was still strong compared with other years.

Half a million customers (496,127) customers on average still moved to a new supplier every month in 2020. In the final month of 2020, 464,449 customers switched electricity supplier, down 10.6% compared to December 2019.

"During a year when everyone's attention has, unsurprisingly, been on other issues, it's encouraging to see six million customers changing supplier in 2020 and benefitting from the products and services on offer. "As we settle into a new year, there's no time like the present for customers to get in touch with their supplier and check they're on the right tariff for them or shop around for a better deal.

"However, the best way to save on energy bills in the long term is to improve the energy efficiency of your home. This can save hundreds of pounds and make homes more comfortable to live in – all while cutting our contribution to climate change," said Energy UK's Emma Pinchbeck.

A quarter of all switches went to challenger energy suppliers

The data released by Energy UK shows that more than a quarter chose to move away from the larger suppliers to smaller challenger companies.


British Gas, Bulb, EDF Energy, E.ON, Octopus Energy, OVO and Scottish Power are the most prominent suppliers on the market under Ofgem's revised definition which classifies all suppliers with a market share of 5% or above as a larger supplier.


Increased competition and improving standards among smaller suppliers saw challenger companies easily beating the larger suppliers in the recently released Which? Survey.


Poor customer service, inaccurate billing and bad complaints handling were the main causes of their low positions. Npower came the bottom of the pile with a customer satisfaction score of just 54%, while British Gas, Scottish Power, Eon and EDF made up the rest of the worst.


Also read: Small Energy Suppliers beat the big companies, and Octopus Energy is dethroned from top spot of the Which? Energy companies' satisfaction survey

Energy Price Cap

The fall in switching numbers could reverse in the coming months as Ofgem prepares to announce the latest energy price cap that will take effect from April 1st.


The regulator is expected to raise the price cap by £66 in an attempt to support energy suppliers who are being impacted by rising bad debts.


Rising wholesale energy prices have also played its part on spurring expectations of a price cap rise.


Currently, the price cap stands at £1,042. The rise will see the 11 million households who have never switched suppliers and who've stayed on standard variable tariffs be hit with higher energy bills.


The price cap change is an excellent opportunity for energy suppliers to attract new customers, especially if their tariffs are cheaper.


Ofgem will reveal just how much of an increase will be made to the price cap early next month.

Further Reading

Get new customers with Dyball's switching portal


Ofgem wants a new independent body to lead the way to Net ZeroCovid-19 Pandemic sees smart meter installations fall to lowest level since 2016


As Lockdown 3 begins the number of customers owing money to energy suppliers hits highest level since 2015


Dyball Associates are proud to help new supply businesses successfully launch in the UK market.

 

Through our energy market consultancy services, and the software we've developed, we're supporting new UK electricity and gas suppliers get set up and start supplying.

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