Consumers chase best energy deals

Consumers chase best energy deals

The number of people changing their gas and electricity company hit 5.1 million in 2007 - a five-year high, according to energy regulator Ofgem.

The figure is up from around 4.8m switches in 2006.

Ofgem said "vigorous competition" had inspired more customers to shop around.

Customer movements throughout last year meant Scottish and Southern Energy overtook E.On as Britain's second biggest energy supplier after British Gas, the watchdog added.

Ofgem chief executive, Alistair Buchanan, said: "The number of customers switching supplier is increasing, and 5m account switches alone in 2007 shows that suppliers who don't offer competitive prices and good service will lose customers.

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"However, some customers have voiced concerns about the market and we have responded by launching an investigation to examine whether it is working effectively for all customers."

The regulator also announced a pilot campaign with the charity Citizens Advice to target pensioners and those on low incomes after research showed they were the groups least likely to switch.

Ofgem estimated that customers who have never switched provider could cut their bills by an average of £92 a year by doing so, despite recent price increases across all the major suppliers.

Suppliers were continuing to compete by providing fixed-price deals, online account deals and green electricity tariffs, which are often cheaper than the standard tariffs paid by many customers.

Tim Wolfenden, head of home services at price comparison site uSwitch.com, said the increase in switchers should not be taken as proof that the energy market was working effectively.

"The biggest concern is that those who could benefit most from switching are the ones who are missing out - our research shows that over two thirds [69%] of the over-60s have never switched," he said.

"It looks like Ofgem will be trying to address this by working with third parties such as Citizen's Advice. But, perhaps more thought needs to be given to how the market communicates with consumers, especially the vulnerable."