Boom in gas prices leaves energy switching at record lows, trade body reveals

The number of customers switching to a new energy supplier has dropped to a record low as soaring gas prices eliminated the motivations for shopping around.

Trade body Energy UK said that only 94,428 customers moved to a new supplier in January, a 73% reduction from the year before.

It is the lowest number of switches since data started being collected in 2013.

It is an unsurprising drop as there is little point in switching to a new supplier.

Energy prices are so high that the best deal on the market is a supplier’s default rate, which is capped by the energy regulator Ofgem.

More than six in ten of those who switched suppliers went from one larger supplier to another larger rival, Energy UK said.

“With high wholesale costs continuing to affect fixed term deals, we are likely to see low switching numbers for some time,” said Matthew Cole, independent chair of the Energy Switch Guarantee.

“Numbers will increase when the market recovers and it remains important that customers are protected by the Energy Switch Guarantee making the process simple, speedy and safe.

“We also expect that, in the future, switching decisions – and this could be to another tariff with an existing provider, or to a new supplier – will be based not just on price but will increasingly incorporate factors like good customer service, environmentally friendly tariffs and flexible deals.”

The price of gas on international markets has increased as much as fivefold, leaving suppliers simply unable to offer competitive deals.

At the moment, the cost to suppliers of buying gas is higher than they are legally allowed to sell it for to price cap customers.

Some of this is likely to be rectified in April, when the price cap is raised by 54% for the average household, pushing up average bills by around £700 per year.