Just a quarter of Brits have changed their gas and electricity supplier over the past year

December 10, 2014

As temperatures start to fall and many Brits struggle to cope with the pressure of paying energy bills, new research from Mintel highlights the widespread consumer inertia which exists in the energy industry, and finds just a quarter (25%) of consumers have changed their energy supplier in the last 12 months.

And it seems this reluctance to change supplier is set to continue, as the majority of Brits (59%) admit they have no plans to switch supplier over the coming year. Today, less than one in five (18%) consumers claim they plan to switch providers over the next 12 months. Meanwhile, there remains a core group of Brits (23%) who are unsure whether or not they will make the change.

And for those who have switched – the top three reasons for changing have been finding a cheaper tariff on a price comparison site (46%), moving to a supplier that offered a fixed tariff (19%), or moving to an alternative supplier which directly offered better rates either by phone or email (12%).

But it is not all about price, indeed, Mintel’s research reveals the same number (12%) of consumers have moved as a result of poor customer service. Furthermore, around one in ten (9%) switched because they wanted to go to a smaller supplier while 6% switched to a supplier who provided greener energy from wind farms.

Claudia Preedy, Industrial Analyst at Mintel, said:

“Switching supplier has never been easier, yet the majority of Brits have not and do not plan to make the switch, meaning many people are missing out on considerable savings on their energy bill. While consumers are frequently being encouraged to consider energy options, when it comes to switching suppliers, for most there remains considerable inertia.”

While consumers are frequently being encouraged to consider energy options, when it comes to switching suppliers, for most there remains considerable inertia.

“For those who do make the switch, finding a lower cost provider seems to be the greatest incentive. However, poor customer service remains a key reason for people switching supplier and is clearly an area which needs to be a focus of improvement for all suppliers in the near future.”

In terms of those who have switched, consumers aged 25-34 are the most likely to have made the change (33%), as well as households with children aged 5 and under (34%). Meanwhile, those living in the East Midlands are most likely to have switched supplier in the past 12 months, with 30% having done so, closely followed by the West Midlands (29%). At the other end of the scale, just 21% of people living in Scotland have changed supplier.

Some 23% of people living in London plan to switch supplier in the next 12 months, with the same proportion of people living in the North West also inclined to do so. Just 11% of people living in the South West plan to change supplier in the next 12 months.

For those consumers who are looking to change suppliers (18%) or who remain unsure about changing suppliers (23%), the biggest incentive for change would be a cheaper tariff on a price comparison site (52%), a price hike (35%) or if there was a cheaper deal advertised (32%). More than one in ten (13%) of those considering a change would switch to move to a fixed tariff. Meanwhile, 10% would switch to a supplier who provides “greener energy”, with 16 to 24 year olds being most likely (15%) to switch to a greener energy supplier. Some 7% of consumers would consider a smaller supplier.

“Smaller independent suppliers are gaining market share from the “Big Six” with many winning customers by offering cheaper tariffs. ‘Green energy’ is also a growing, albeit, still a niche sector of the residential energy supply market. According to our consumer research, around one in twenty changed supplier in the last 12 months to switch because they wanted a supplier who provides “greener” energy. Meanwhile, one in ten consumers planning to switch or who are unsure about switching in the next 12 months, would do so to switch to a “green” supplier, which is encouraging news for the green energy industry. In line with this, ‘Green’ energy suppliers are reporting strong customer growth.” Claudia continues.

Finally, Mintel’s research shows that if there were a price hike just a quarter (25%) of consumers who are looking to or are not sure about changing supplier in the next 12 months aged 16-24 say they might change their supplier as a result of this, compared to four in 10 (40%) of consumers aged 55 and over.

Press review copies of the ‘Energy Industry’ report and interviews with Industrial Analyst, Claudia Preedy, are available on request from the press office.

Mintel’s Business Report series publishes over 60 reports annually across the Construction, Engineering, Finance, Services, Technology, Utilities and Energy sectors. To find out more about these reports please visit: //www.mintel.com/mintel-industrial-and-b2b-reports

Lizzie Tantam
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