People get better energy deal in trial collective switch – and save £300

MORE than a fifth of disengaged energy customers who took part in a trial collective switch moved to a new deal, the regulator has reported.

On average customers saved approximately £300, Ofgem said.

It said the collective switch trial involving around 50,000 customers from one of the six largest suppliers between February and April was the most successful it had completed to date.

It is part of a programme of trials to help people on poor-value default deals who rarely switch to save money on their energy bills.

The customers received letters showing how much they could save by moving to an E.On collective switch tariff negotiated by the price comparison service Energyhelpline.

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 for them to start the process.

Overall, 22.4% of customers in the trial switched to achieve an average saving of around £300, Ofgem said.

Of these, approximately half chose the collective switch tariff and just under a quarter moved to other cheaper deals through Energyhelpline, while the remainder chose another tariff without using the price comparison service.

Almost a quarter of customers who switched either to the collective switch tariff or to other deals listed by Energyhelpline were over 75 years old.

The 22.4% overall switching rate in the trial compared to a 2.6% switching rate in a trial control group of similarly disengaged customers who did not receive any information about the collective switch offer.

Rob Salter-Church, Ofgem’s interim executive director for consumers and markets, said: “Many customers on poor-value default deals rarely switch because they think it’s too much hassle or might not realise how much they can save.

“The results of this trial demonstrate that offering a simplified collective switch and providing personalised savings can be a big help in giving these customers the confidence and reassurance they need to start a switch.

“It’s particularly welcome to see many of those who typically are less likely to switch, such as older people, taking advantage of the savings available during the trial.”

Collective switching tariffs are negotiated, usually through an auction, and offer a unique, discounted energy tariff.

Ofgem is planning a larger collective switching trial involving over 200,000 customers later this autumn.