Open letter: Active choice collective switch trial - early findings
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Reports, plans and updates
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- Supply and Retail Market
In 2016, the Competition and Markets Authority (CMA) concluded that there was an adverse effect on competition in the retail energy market, stemming from a lack of consumer engagement.
Following the CMA’s energy market investigation, we have tested a variety of approaches for engaging disengaged consumers and helping them to switch to cheaper tariffs.
The simplified collective switch trial, which ran between February and April this year, is the most successful trial Ofgem has completed to date. It involved around 50,000 customers from one of the six largest energy suppliers who had been on a standard variable tariff for three years or more.
Our headline results from the trial have shown that 22.4% of customers in the trial switched overall. Customers who switched to a new tariff averaged savings of around £300*. Of these, approximately half chose the collective switch tariff. Just under a quarter moved to other cheaper deals through Energyhelpline, and the remainder chose another tariff without using the price comparison service. Almost a quarter of customers who switched either to the collective switch tariff or to other deals listed by Energyhelpline were over 75 years old.
Based on these positive results, we are launching two larger scale trials this autumn. The results will inform our next steps, including our ongoing policy development process, which will include considering how we might facilitate the benefits of this approach to a wider range of disengaged energy consumers.
* Excludes savings for customers who switched to deals without using Energyhelpline.