No sign switching will return to historic levels any time soon

The number of customers switching electricity supplier has dipped for the first time this year.

Following four consecutive months of growth, May saw the first recorded drop in customers switching supplier in 2023.

In total, Energy UK figures reveal 150,852 consumers switched to a new supplier in May, down considerably on the 197,620 switches recorded in April.

Despite the dip, the number of switches recorded in May was still 63% higher compared with the same period last year.

However, Energy UK’s report cautions that while “switches are up from last year, there is no sign they will return to historic levels any time soon”.

Prior to the energy crisis, the number of customers switching supplier each month often exceeded 400,000.

The majority of switches in May were between larger suppliers (63%) with switches between large suppliers and smaller firms more or less cancelling each other out.

Movement between supplier groups, May 2023:

• 63% were between larger suppliers
• 19% were from larger to small and mid-tier suppliers
• 14% were from small and mid-tier to larger suppliers
• 4% were between small and mid-tier suppliers

For much of the year, industry analysts have predicted that switching would return this summer with some retailers now offering tariffs below the price cap.

Last week, So Energy became the first supplier to offer a fixed tariff below July’s price cap. However, the retailer pulled the offer from the market later in the week due to “unforeseen increases in wholesale energy prices” before reinstating the tariff when market prices improved.

Utility Warehouse has also launched a fixed price energy tariff which is £100 below the new price cap, making it the cheapest on the market.

The multi-utility provider’s Fixed Saver 1 tariff will allow customers to fix their energy prices at an average cost of £1,974, £100 below Ofgem’s Q3 cap.

Yet the deal is only available to customers who take energy as well as at least two other services provided by Utility Warehouse, such as mobile, broadband or insurance.

Despite a return to competition, there are concerns about consumers missing out on further savings if they rush to fix their costs now.

Robert Buckley, head of relationship development at Cornwall Insight, recently told Utility Week that consumers should be wary about taking fixed priced deals due to the volatile nature of the market.

He added: “While our cap numbers out for the next couple of quarters are below £2,000 at the moment, we have got no surety that that will continue.”