Fewer households switching their energy suppliers
March 11, 2008
A recent report has shown that fewer households are now switching their energy suppliers, and for many this is working out to be very costly. Some consumers in the UK are stuck on price fix tariffs, where the cost of their energy usage was fixed when prices were at their highest last year. The first half of this year saw the number of households that were switching their energy suppliers fall by 1.5 million according to figures, falling from 7.5 million to 6 million.
Since January just over 3 million households have switched electricity suppliers, and around 2.8 million have switched gas suppliers. The lower level of switching may also be contributed to the reduction in gas and electricity prices, which came into force after March of this year. Price wars between energy suppliers, including British Gas, which slashed its prices twice in the space of a couple of months, have enables some consumers to get better deals.
However, although many people may be sticking with their energy provider and not switching because they now have a better deal on their energy usage costs, many others may be sticking it out because they are tied to fixed rate tariff contracts that are costing them dearly now that energy prices have fallen so significantly.
One industry expert stated: ‘Many customers tied themselves into two- or three-year contracts with suppliers when prices were rocketing, so switching would be an expensive option for many people. And equally as prices are now dropping, those who do have the freedom to switch are probably thinking that it’s worth holding on to see if the competitive marketplace forces prices even lower – and they’d be right to do so.’
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