More than one in five disengaged customers who took part in Ofgem’s trial of a simplified collective switch changed their energy deal, eight times the switching rate for customers who received no information through the trial about better offers.
Ofgem is working with suppliers to make it easier for people on poor value default deals who rarely switch to save money on their energy bills. The regulator is running a programme of trials to find the best ways to help these customers make better choices about their energy bills.
The simplified collective switch trial, which ran between February and April this year, is the most successful trial Ofgem has completed to date. It involved around 50,000 customers from one of the six largest energy suppliers who had been on a standard variable tariff for three years or more.
These 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.
When selecting the collective switch tariff, Ofgem required Energyhelpline to choose a supplier that had a customer service rating of a least three out of five stars (according to Energyhelpline’s ranking system).
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 to start a switch.
When customers contacted Energyhelpline online or by phone they also received information about potential savings from other deals across the market.
Overall, 22.4% of customers in the trial switched. Customers who switched to a new tariff averaged savings of around £300*. Of these, approximately half chose the collective switch tariff. Just under a quarter moved to other cheaper deals through
Energyhelpline, and 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 compares to the 2.6% switching rate in the ‘trial control group’ of similarly disengaged customers who did not receive any information about the collective switch offer.