Energy switch spend ‘down drain’

The millions of pounds spent on marketing and data analysis to get consumers to switch energy supplier could be going down the drain due to a widespread belief among consumers that changing supplier is too much of a hassle with no financial benefit.
That is the conclusion of a report published by think-tank Centre Forum – and commissioned by Comparethemarket.com – which shows customers are still being put off from switching because of the confusing information on tariffs.
On one level, this inertia is good for the “big six” energy companies as it makes it look like customer churn is low, however, there has been massive regulatory and political pressure to make it easier for consumers to shop around.
Even the Department of Energy & Climate Change is getting in on the act, with its latest campaign – The Power to Switch (pictured) by agency Kindred – encouraging people to switch energy tariff or supplier.
Both regulator Ofgem and government ministers have tried to ensure customers are aware of the cheapest tariffs available. But UK household switching rates remain in decline, according to the think-tank; although at 13% they are nearly double that of mainland Europe, there was a drop of 5 percentage points in the average switching rate between the four years to 2012 and in 2013 – the biggest drop in the EU.
“The obfuscatory way that information is presented by energy companies acts as a barrier to switching supplier,” said Tom Papworth of Centre Forum. “Customers frequently complain about receiving too much information, and having too much choice, rather than too little. Bills are complex and like-for-like comparisons are difficult.”
The study estimates that if everyone in the UK moved to the best energy tariff for them it would save UK households up £4bn a year.