Where energy switching went wrong
In today’s Whiteboard Friday, our Energy expert Guy Thompson tells us why energy switching rates are so low and has a look at how much money UK as whole could save each year if more households were switching their energy supplier(s).
“Afternoon and welcome to another Whiteboard Friday with MyUtilityGenius. Now, last week we talked about suppliers, this week we are going to have a chat about switching. And why perhaps people are not switching as much as they could do given the fact that there is a lot of cash on offer.
So the first thing we can say is that there is a lot of distrust. Now effectively, what do we mean by that: most of you out there think that the people involved in the energy industry: the big 6, the government, the regulator are nothing more than a bunch of overdressed estate agents running around trying to flog you with anything that looks like it could make them money.
Secondly, there is the whole Vicki Pollard: ‘Am I bothered’ ! Because there is actually, no one believes there is money to be saved or it looks like so much hard work… So actually on balance, everyone has failed to engage everybody in this market and people think they have better things to do.
If you get over these two things you end up with the fear problem. We now have people worried about ‘will their gas and power still be on if they switch supplier?’, ‘Will their turkey be cold at Christmas because the gas has been shut off?’.
So we have Distrust, Engagement, Fear… Even if you get over those, you still end up with the fact that you are looking at a bill that looks like Greek: you have absolutely no idea what it says, what it means, what you can do about it… It is far too difficult for me… So there is a massive degree of complexity.
What all this means, to all of us and to the collective energy position as a whole? These things all add up to leave us with a huge amount of Pound Sterling going down the Sh#*&… Lavatory! All the way down there and then up there splurging to somewhere else… What does it mean over the course of time since deregulation back in 2001? So we are talking about 12-13 years…
There are 26M households in the UK, 65% of them have never switched. We know through statistics and analysis that the average saving is £217 per household, per switch and per annum. You multiply all that and you end up with: (yes my faithful assistant has conveniently pulled up for you) 8 Shards, that’s £3.6Bn. If you are a bit more sporty and enthousiastic, we have an Olympics legacy that we can look at: We have got £43Bn since 2001 spent on the equivalent of 5 Olympic games.
So we are collectively shunting a huge amount of money out of the window, all because of these 4 words. That means that almost none of us is switching. So what we want to look at time next time: how you can switch energy easily! Until next time, bye bye”