Energy customers could soon start shopping around for better deals, experts say
An energy consultancy said it thinks the number of customers switching to a new supplier could skyrocket from the start of July.
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Your support makes all the difference.Energy suppliers could soon start offering fixed-term energy deals that are cheaper than the Government’s price guarantee, making it worthwhile for customers to start shopping around again.
Cornwall Insight, an energy consultancy, said it thinks the number of customers switching to a new supplier could skyrocket from the start of July.
It would bring back a semblance of normality to an energy market which has been completely transformed by a pricing crisis over the last couple of years.
In 2019 nearly half a million customers were switching suppliers every month in a bid to find a better deal than they would have got with their current supplier.
But that dropped to a trickle during the energy crisis. In 2022 just 85,000 households were switching every month.
The soaring energy bills made it virtually pointless for customers to switch, because no energy supplier was able to offer a fixed-term deal that was significantly cheaper than the price cap on energy bills.
If suppliers' costs decrease and government-supported rates remain relatively high, it is likely we will see a significant revival in reasonably priced energy plans, with millions of households finally able to take advantage of the savings they have been missing out on for years
Since October, the Government has also been helping people with their bills, which would otherwise have likely tracked the energy price cap up to more than £4,000 per year for the average household.
At the moment that support reduces average bills to £2,500. That support will become less generous from the start of April, when it rises to £3,000.
As a result, the price of energy is likely to fall below that level from the start of July, Cornwall said.
Cornwall Insight senior consultant Kate Mulvany said: “The energy market is complex, making it difficult to predict the effects of policy changes on consumer behaviour and energy pricing.
“However, if suppliers’ costs decrease and government-supported rates remain relatively high, it is likely we will see a significant revival in reasonably priced energy plans, with millions of households finally able to take advantage of the savings they have been missing out on for years.
“There are many variables still in play, and it is difficult to know how fast and how far energy bills will fall.”
She added: “To see rising switching we are also relying on consumers engaging with an energy market, which many are understandably wary of.
“It is possible some households may choose to stick with what they know instead of choosing cheaper options.”
Richard Neudegg, director of regulation at Uswitch.com, said: “The return of fixed deals to the energy market would finally give consumers the freedom of choice over their supplier with an option to lock in more certainty on pricing.
“With wholesale prices stabilising, though still high compared to past years, there is an opportunity for suppliers to start offering more competitive rates.”