Electricity switching rises 14% to hit three million

The number of customers switching electricity suppliers has risen 14% this year.

Over three million customers had already switched their electricity supplier by the end of July, according to the latest figures.

Energy UK, the trade association for the energy industry, said one in five had signed up to small or medium sized suppliers.

In July alone 385,000 customers switched, a 16% increase on July 2016.

Lawrence Slade, chief executive of Energy UK, said: "There are now over 50 suppliers to choose from, which is driving innovation, improvements to customer service and providing an incentive to keep prices competitive as suppliers fight to keep and attract customers."

Although the largest number of switches were done by customers moving from one large supplier to another, some 34% transferred from a large supplier to a small or mid-tier one.

The steady increase in the number of consumers looking for better deals comes as electricity and gas price rises outstrip inflation.

British Gas owner Centrica said in August it would hike electricity prices on its standard tariff by 12.5% from September, although it is maintaining a freeze on its gas prices.

The five other big suppliers - E.ON, ScottishPower, npower, EDF Energy, and SSE - have come out with similar increases.

The price comparison website uSwitch estimates that the average annual cost of dual-fuel standard tariffs from the "Big Six" will rise between 7% and 10%.

However, those taking advantage of switching are still in a minority. uSwitch believes that seven out of ten households are overpaying for gas and electricity on expensive standard tariffs.

The reasons for the inertia were revealed in a report last year by the Competition and Markets Authority (CMA).

It said: "Those who have low incomes, have low qualifications, are living in rented accommodation or who are above 65 are less likely to be engaged in the domestic retail energy markets."

However, it also found that consumers in these groups were the ones most likely to gain from switching energy supplier.

Another review into the cost of energy was announced last week.

It will be led by Professor Dieter Helm and examine the entire electricity supply chain of generation, transmission, distribution and supply, in light of the Government's ambition to have the lowest energy costs in Europe.