Trust in energy firms "never been lower"
Filed under: Utilities
The number of consumers switching energy supplier is at an all time low, according to new data from The Department of Energy and Climate Change (DECC).
The end of last year saw the lowest number of electricity switches made since records began, and this trend appears to be a result of low consumer confidence.
The figures reveal that between the third and fourth quarter of last year gas and electricity 'transfers' fell by 26 per cent and 23 per cent respectively - the equivalent of 83,000 fewer people switching gas, and 91,000 fewer people switching their electricity.
The fall has been more prolonged than just last year though - figures reveal that in the last quarter of 2011 a total of 535,000 people switched supplier, in comparison to 749,000 people in the last quarter of 2010 and 777,000 people in the last quarter of 2009.
Tom Lyon, energy expert at uSwitch.com says the data "tells us what a sorry state the energy market is in today. The number of people switching is a simple acid test that tells us the current state of health of the market. What we can see today is that it is on the critical list, with trust and confidence at an all-time-low."
So why are we not switching?There is clearly a great deal of negativity about energy suppliers after the dramatic price rices of last year. In fact, Lyon says "consumer trust in suppliers has never been lower".
With trust and confidence in suppliers so low, Lyon explains that "consumers simply do not believe that prices have come down and therefore don't feel they have a choice or that they can get a better deal by switching".
And uSwitch has highlighted that five of the big six energy suppliers stopping doorstep selling, while an excellent move, will also have had an effect on the number people switching.
What is the industry regulator doing?Energy regulator Ofgem is currently conducting a Retail Market Review after much criticism that the energy market is to confusing for consumers and suppliers are not transparent enough about their prices.
The result of the review are expected this summer, so consumers can only expect to see implementation of the reforms coming towards the end of the year.
Why switch?There is currently no indication of a rise in prices, though it is also unlikely that energy companies will be passing on further savings to consumers - so switching is your best bet for cutting the cost of your bills.
Consumers who have never switched supplier are likely to be able to save enough to wipe out the price rises of last year, according to Lyon.