A majority of consumers in Wales are completely switched off from the energy market and missing out on savings, according to comprehensive new research from Consumer Focus Wales.
Wales has some of the lowest levels of switching energy supplier in Great Britain. The watchdog’s latest report – Switched Off: consumer views on energy switching in Wales – shows that a decade of free market competition has failed to convince people that regularly switching their energy supplier makes a difference.
Lindsey Kearton, energy expert at Consumer Focus Wales, said: “As energy bills have escalated over the last year, with the average annual fuel bill now over £1,200, it has become more important than ever that consumers look for the best possible deal for their circumstances. Yet despite the rising cost of energy, most consumers in Wales are missing out on savings which could amount to hundreds of pounds a year.
“More than two in every five Welsh consumers have never switched their energy supplier. Many of those who have switched have done so just once, switching from separate gas and electricity suppliers to a dual fuel deal. That means as many as eight out of ten households in Wales could be paying more than they need to heat their homes.
“All the messages from the regulator suggest that consumers get the best deal by switching supplier regularly. This keeps the market active and encourages suppliers to compete. Yet a clear majority of consumers in Wales are completely switched off by the prospect of switching. Just one in eight households are regular switchers, changing every year or two in order to keep their costs down.”
Ten key findings:
- Former monopoly suppliers Swalec/SSE and British Gas dominate the market in Wales supplying electricity and/or gas to more than 2/3 of homes between them
- Direct debit is the most popular payment method, used by over half of households
- More than two fifths of households have never switched, and show no inclination to do so
- One in eight households describe themselves as regular switchers – comparable with the GB average
- Regular internet users are more likely to be switchers
- People living in North Wales are more likely to switch than those in Mid and South Wales
- Saving money is by far the biggest reason given for switching supplier (69%)
- Main reason for not switching – ‘happy with current supplier’ (59%). One in five said it was too much hassle
- 67% said it was not at all likely they would switch in the foreseeable future
10. More than nine out of ten customers (94%)who have never switched, said they were unlikely to do so in the coming year
Ms Kearton added: “Our report finds a big difference in attitudes and experiences from those who switched using the internet, and those who did so on the doorstep. Internet switchers are more likely to believe they have made savings – indicating that the greater information available online helped them make a more informed choice. We want to see all suppliers improving the information they provide at the point of sale and allowing people more time to consider the options before making a decision to switch to help build up the trust between suppliers and consumers.
“We also know that simply giving consumers more information won’t necessarily result in action. Supporting behaviour change is a process which requires greater understanding of the factors that determine why people behave the way they do. We want to see future switching campaigns providing more hands-on switching support for those groups who could benefit most from changing their supplier or tariff. We also want to see clearer signposting of the assistance available – from suppliers and the Welsh and UK governments – to the most vulnerable including people in fuel poverty.”
Notes:
An embargoed copy of the full report Switched Off: consumer views on energy switching in Wales can be seen at http://www.consumerfocus.org.uk/wales/files/2012/01/Switched-off-English-WEB.pdf
The report is being launched during Big Energy Week, an initiative bringing together consumer organisations, energy suppliers, switching sites and Government agencies to let consumers who are struggling with rising energy bills know about all the help that is available. http://wwwbigenergyweek.org.uk
Consumer Focus Wales is organising an Energy Question Time event with representatives of the four main political parties in the Seligman Room at the Wales Millennium Centre on Wednesday January 18 at 12pm to formally launch the report. Media welcome.
Research was conducted by Beaufort Research in November 2011. In total 1,008 interviews were conducted, of which 823 were completed by bill payers.
