Ofgem’s latest collective switch trial sees record numbers save money



Record numbers of people have saved money after taking part in Ofgem’s latest collective switch trial.

Ofgem has revealed that around 30% of disengaged customers who took part in its latest simplified collective switch trial changed their energy deal.

This was almost seven times higher than the 4.5% switching rate for customers who received no extra information.

A total of 90,000 disengaged customers, who had been on a default standard variable tariff for three years or more, took part and those who switched saved on average £263.

Customers received letters inviting them to switch to a collective switch tariff negotiated by the price comparison service energyhelpline.

When selecting the collective switch tariff, Ofgem required energyhelpline to choose a supplier that had a good customer service rating.

Ofgem said that unlike other collective switches, customers did not have to provide complicated information about their existing tariff to see a personalised savings calculation, making it easier to start a switch.

The switching rate for customers on the Priority Services Register (who are often in vulnerable situations and tend to switch far less frequently) was almost as high as for other customers in the trial.

Customers without access to the internet are also more likely to benefit, as 71% of customers who switched through energyhelpline chose to do so over the phone.

The collective switch completes Ofgem’s latest round of trials to find the best ways to help disengaged customers make better choices about their energy.

Ofgem introduced the price cap on default tariffs in January 2019 to ensure that customers who do not switch pay a fairer price for their energy.

Ofgem published results of the trials today, which will help inform its ongoing plans for a more competitive retail market after the price cap is lifted.

According to the default tariff cap legislation, the price cap must be lifted no later than 2023, but can be lifted sooner if Ofgem believes conditions for effective competition in the retail market are in place.

In total, 1.1 million energy customers have been part of Ofgem’s engagement trials, and 94,000 of them have switched to better deals – many for the first time - saving around £21.3 million.

The simplified collective switch is one of the variants Ofgem has been trialling of the database of disengaged customers that the Competition and Markets Authority (CMA) recommended following its investigation into the energy market.

Ofgem has said that it does not consider that a database is required to support such engagement initiatives and are looking at alternative ways of enabling the necessary data to be shared, aligning with our open data and data mobility initiatives.

Mary Starks, Ofgem executive director for consumers and markets, said: “Ofgem’s latest simplified collective switch, and the wider programme of engagement trials we have been running, show the potential to get the energy market to work better for disengaged customers, including the vulnerable. The results will inform our plans to ensure that customers still get a fair deal and that more enjoy the benefits of competition after the price cap is lifted. In the meantime, customers who do not switch will always pay a fair price for their energy under the price cap.”



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