Londoners least likely to switch electricity supplier

Citizens Advice says suppliers need to tackle unfairness of standard variable tariffs

Fewer people in London switch electricity supplier than any other region in England, according to new analysis by Citizens Advice.

The national charity has also estimated that as many as 4.7 million households in England have stayed with the same supplier for at least the last 10 years - many will be on standard variable tariffs, usually the most expensive bill. 

Switching to a cheaper tariff with a different supplier can cut people’s energy bills by hundreds of pounds.

The new analysis looks at the percentage of households in each local authority area in England that switched their electricity meter to a different supplier in the year between October 2015 and September 2016.

The 10 places in England with the lowest proportion of households who switched supplier were all within the Greater London area, the analysis of data provided by ElectraLink shows.

The borough in which the fewest households switched supplier in England was Kensington and Chelsea - where just 6.5% of households switched electricity supplier.

Peterborough in Cambridgeshire had the highest switching rates - 19.4% of households changed supplier.

Over 900,000 homes are privately rented in London - making up over a quarter of households, a higher proportion than in any other region in England.

Citizens Advice believes this could be one reason why fewer people living in London are switching supplier. Often tenants don’t realise they can switch supplier themselves. Those that do can be charged a termination fee for ending a fixed term contract early if they have to move, or can find they have to take extra steps to switch, such as checking with their landlord first and switching back to the original supplier at the end of their tenancy.

39% of homes in Kensington and Chelsea are rented from private landlords, compared to 20% in Peterborough.

Private renters can also face higher bills. Those living in homes that aren't energy efficient could pay up to £1,000 more than the national average to heat their home to a comfortable level.

The places in England with the lowest and highest percentage of households that switched electricity supplier are:

The three places with the fewest people switching supplier outside Greater London are Broxbourne in Hertfordshire (with 10.9% of households switching), followed by Purbeck in Dorset (11.0%) and the Isle of Wight (11.1%).

The national charity thinks local authorities across the country can play an important role in helping local people switch. People are twice as likely to trust their local authority as their energy supplier - putting councils in a good position to help people get the best deal possible by switching as a group or individually.

Local councils have run collective switches before, where local residents sign up to allow their council to hold an auction for the energy supply and manage the switching process. 19 London councils participate in the Big London Energy Switch (BLES) which runs regular auctions and in 2012 saved people who switched £114 per year on average.

Citizens Advice is encouraging people to switch supplier as part of the solution but also recognises more needs to be done to help loyal customers with low incomes who are paying for the more expensive standard tariff. The charity is calling for suppliers to look at billing these customers at a cheaper rate.

Gillian Guy, chief executive of Citizens Advice, said:

“Switching supplier can cut hundreds of pounds off electricity bills but many people aren’t switching.

“This means that loyal customers and private renters, who can face multiple barriers to switching, are left paying a premium on costly standard tariffs

“We have had long standing concerns about the energy market failing people. It is high time that energy suppliers found a way to help loyal customers save money on their bills. One way they could do this would be to bill customers who are on a low income on the standard tariff at a cheaper rate, creating savings for those who can benefit the most.”

Anyone looking to save money on their energy bills now can use the Citizens Advice price comparison tool to look for a cheaper deal, or can contact their nearest Citizens Advice for help.

Notes to editors

1. Citizens Advice analysed electricity meter data provided by ElectraLink. City of London and Isle of Scilly were excluded from the analysis because of the small number of households in these areas.
2. ElectraLink was created in 1998 by the UK's Electricity Distribution Network Operators (DNOs) to provide an independent, secure and low-cost service to transfer data between the participants in the deregulated UK electricity market. The company continues to operate the regulated Data Transfer Service (DTS) that underpins supplier switching, meter interoperability and other processes critical to a competitive energy market.
3. Figures published by the CMA show that 21% of households in England haven’t switched their energy supplier for ten years or more, and the English Housing Survey finds there are 22.5m households in England - Citizens Advice estimates that this means there are as many as 4.7m households in England that haven’t switched their supplier for 10 years or more.
4. The potential savings from switching energy supplier were calculated using Ofgem’s switching saving figure and Ofgem’s switching rate for customers from August 2015 to July 2016.
5. The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
6. The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
7. To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
8. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
9. Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
10. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.