NEWS

The number of households switching their energy suppliers has increased again. But are switchers making genuine savings? 

The number of energy customers switching suppliers is at its highest level since the start of the 2021 energy crisis. Driven by advice from influential consumer journalist Martin Lewis to lock down a tariff before the price cap increase in October, more than 250,000 customers decided to make the switch. However, industry research has found that only minor savings can be found when you switch. This is because energy suppliers’ tariffs are too similar to each other. 

In this article, we’ll look in depth at the latest figures and discover if customers can still get a good deal. Let’s get started.

Switching numbers increasing

The latest data from Electralink shows that in July 2024, there were 257,000 total energy supplier switches. Of that figure, 225,000 were by domestic customers and 31,000 were from business. 

The total switching figure is 20% higher than in June 2024. So far this year, there have been 1.63 million changes in energy suppliers. This time last year, that figure was only 1.18 million.

The majority of switches (62%) in July were from one large supplier to another, carrying on the trend from previous months. This is worrying for smaller suppliers that have struggled through the energy crisis.

All this comes ahead of a forecasted Ofgem price cap rise in October. As we go into winter, energy prices are going to rise, so smart customers are now locking in their lower rates with fixed-rate tariffs that match the current cap.

How much can you save?

However, the most worrying news is that the amount of money you can save by switching energy suppliers has decreased dramatically. Research by energy industry specialists Cornwall Insights discovered that where you used to be able to make significant savings, it’s now just a few pounds.

Only a few months ago, consumers could save between £60 and £80 per year by shopping around for the cheapest fixed-rate energy tariff. However, when analysing the current tariff marketplace, Cornwall Insights found that the average saving is only £5. 

Cornwall Insights put forward some reasons for this decrease:

• Several suppliers have withdrawn their cheapest tariffs ahead of a price cap rise in October
• The ban on acquisition-only tariffs takes away suppliers’ flexibility when offering cheaper deals
• Suppliers are competing with each other in different ways, such as customer service

The ban on acquisition-only tariffs (known as BAT) is an interesting topic causing a lot of controversy in the industry. The ban is designed to protect vulnerable consumers from switching to low tariffs that bounce back up after their introductory term expires. However, for the most savvy consumers who stay ahead of the market and switch regularly, it feels like they’re being penalised.

Looking to the future

With the price cap due to rise in October, it’s likely that we’re in for another winter of high bills. Meanwhile, no matter how many consumers switch, encouraged by influencers like Martin Lewis, there are no significant savings to be found.

There can still be competition in the industry, but is better customer service or innovative apps really a substitute for money in your pocket? The next round of figures will give the sector a signal of whether suppliers can get away with low-value tariffs. If switching numbers drop again, suppliers may need to rethink their strategies.