Recovery ‘in sight’ as electricity switching increases

Electricity switching saw a resurgence in June as the UK gradually eased lockdown measures.

Switching has seen a dip due to coronavirus in recent months, with May recording a three-year low.

The latest figures from Electralink’s Energy Market Data Hub show 470,000 switches were completed last month, marking both a year-on-year and a month-on-month increase – 6 per cent more than June 2019 and just under eight per cent more than May 2020.

Furthermore, the number of switches started also indicate a recovery in switching behaviour. There were 631,000 switches started in June 2020, 14 per cent more than June 2019 and 24 per cent more than May 2020.

Electralink said the exact causes for the recovery in switches completed and started is unclear, but speculated there could be two main reasons. With people returning to work as lockdown eases, engaging with energy providers may become more of a priority as life returns to normal. Alternatively, suppliers managing a backlog of requests caused by the lockdown might place greater emphasis on processing switching requests.

In terms of switching types, moves to challenger brands from the big six accounted for the biggest proportion, with 149,000 – 19 per cent more than June 2019 and 40 per cent of June 2020’s total switches completed.

Elsewhere:

• Big six to big six switches reached 103,000 – 13 per cent less than June 2019 and 22 per cent of June 2020’s total completed
• Challenger to big six switches hit 60,000 – 13 per cent less than June 2019 and 13 per cent of June 2020’s total switches completed
• Challenger to challenger switches reached 115,000 – 21 per cent more than June 2019 and 25 per cent of June 2020’s completed total switches

Meanwhile Energy UK also found switching to have increased compared to the same period last year, the first time it has done so since lockdown. The trade body reported slightly less switches than Electralink, with 450,000 – up 1 per cent on June 2019.

Energy UK said close to 3 million customers have moved to a new supplier in the first half of the year, down 4 per cent compared to the same point last year when a record 6.4 million customers switched.

The organisation has previously said that discrepancies between the two sets of figures likely arise from differences in their definitions of switches, including when they are judged to have been completed, as well as the way they are reported.

According to Energy UK’s figures for June, of all switches:

• 42 per cent were from larger to small and mid-tier suppliers
• 11 per cent were from small and mid-tier to larger suppliers
• 24 per cent were between larger suppliers
• 23 per cent were between small and mid-tier suppliers

Emma Pinchbeck, Energy UK’s chief executive, said: “It is positive that 3 million consumers have switched supplier in the first half of the year despite the pandemic. I’d encourage everyone to make sure they’re on the best deal either by getting in touch with their current supplier or by shopping around.

“The best way to save on your energy bill in the long-term is by making your home more energy efficient. I’d urge all eligible households to take advantage of the new ‘Green Homes Grant’, announced by the chancellor last week. Energy efficiency improvements will save money, cut emissions and create jobs, kick-starting the green recovery.”