· Ofgem reveals UK energy switching levels hit 5 million in 2007, but whole groups of customers are missing out[1]
· Pensioners, unemployed and low income families are potentially not switching, leaving themselves vulnerable to price rises
· Prices have risen by around £1.5 billion in 2008, 15% or £136[2] per household on average - average household bill now stands at £1,048[2]
· Online plans are on average £187 or 18% a year cheaper than standard plans[3] and £218 or 20% cheaper than pre-payment meter tariffs[3], but do the vulnerable feel excluded because of the 'online' link?
· Missing a trick: less than 1 in 5 (19%)[4] consumers are on an online energy plan - 16 million households[5] are failing to protect themselves from impact of higher prices.
Tim Wolfenden, Head of Home Services at uSwitch.com, comments: "An increase in switching has got to be welcomed, but cannot be taken in isolation as proof that all is well in the energy market. We can only start slapping ourselves on the backs over the healthy state of competition in the UK when we know that people are switching properly, sensibly and regularly. Making use of competition should be a habit - an annual financial health check - not a one off moment of weakness with a door step energy salesman.
"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. 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. There are some great energy deals out there, but many potential switchers may be put off because these deals are labelled 'online' - more needs to be done to explain these and make them accessible to as many groups as possible.
"Overall, it's clear that great strides have been made, but perhaps now is the right time to pause a moment to make sure that consumers are staying in step and that the vulnerable are not being left behind. We have the makings of a really good competitive market, but we still have some way to go before we can say that all consumers are benefitting."
For more information visit www.uSwitch.com or call 0800 093 06 07
For more information:
Jo Ganly, uSwitch.com on 020 7802 2915 joganly@uswitch.com
Siobhan McCluskey, Lansons Communications on 020 7294 3684 siobhanm@lansons.com
Nicola Hussey, Lansons Communications on 020 7566 9718 nicolah@lansons.com
Joe Laing, Lansons Communications on 020 7294 3649 Joel@lansons.com
Notes:
1. Taken from Ofgem release: 'switching rate hits 5.1 million in 2007' issued 2nd April, 2007
2. Customer using 3,300 kWh of electricity and 20,500 kWh of gas, on a standard Dual Fuel plan, paying on receipt of bill with bill sizes averaged across all regions. Average Dual Fuel bill as at 1st January 2008 was £912. Following price rises by all big six suppliers, the average dual fuel bill is now £1,048. This represents a 15% increase. The £1.5 billion increase is calculated by multiplying the average £136 increase by the total number of UK Dual Fuel households taking a standard plan (11,565,078) - based on YouGov research December 2007.
3. Based on comparison of customers' average bill size for standard plans paying on receipt of bill vs. online plans paying by Monthly Direct Debit and/or prepayment plans. Customer using 3,300 kWh of electricity and 20,500 kWh gas per annum, with bill sizes averaged across all regions. (n.b. EDF online Dual Fuel plan is only available in 10 out of 14 PES regions, and is no longer available to new customers). For Scottish and Southern Energy, the online bill size used for its plan available through Atlantic Electric and Gas - part of the Scottish and Southern Energy group.
4. Based on YouGov research December 2007. Survey conducted online by YouGov between 6th December and 13th December 2007 among a total of 6,918 UK energy customers who are involved in decision making regarding their gas and electricity supplier(s). The figures have been weighted. Global figures have been obtained by extrapolating across customer account numbers provided by the supplier. Those who replied 'Don't know' to which plan they are on were assumed to be on standard plans and therefore included in standard plan figures.
5. Based on the same research as per point 4 above. 16 million refers to the proportion of UK households (out of a total of 27 million) taking a standard plan.
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