Why switching electricity supplier is not all about the money

Why switching electricity supplier is not all about the money

What’s the problem with switching electricity supplier? 

You can interpret that question in a couple of ways. 

Is there any difficulty in making the transition from one supplier to another? No, there’s not. The process of changing over is straightforward.

No, the problem in making the move is that the benefit for many homes can be quite limited. 

The maximum saving for a household with typical consumption is around £90 a year. That’s if you switch from the dearest tariff to the cheapest. Looked at on a monthly basis and the reduction in your bill is just £7.50. Hardly a fortune, is it? And it includes a £50 switching bonus which is obviously not available second time round.

Anyway many people on the dearest tariff are there for a reason. They just can’t be bothered. So they’re hardly likely to be searching the market for the cheapest rate. In theory they could save themselves some money but in practice they’ll just stay where they are.

I suspect those who are currently in the market for the best rates have by now already moved off the least competitive tariffs which means they savings they’ll make will be as I say limited. 

A more typical bill reduction will be around £50 a year which though not huge is not to be sneezed at. 

But in changing supplier, households do not just do themselves a favour, they do the rest of us one too. Switching encourages suppliers to offer better deals. Not enough people do so at the moment. If the switching rates went up, the deals would improve.

Last updated on 11/05/2016

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