Switch - and save €400

Energy bills went up yet again from October 1.

Yet, despite making savings by doing so, fewer people are shopping around for energy suppliers compared to last year.

In 2019 the average potential savings for switching was €207 for an electricity customer, €170 for a gas customer and €401 for a dual fuel customer.

Yet the number of people switching declined 11% year on year!

Gas switching rates increased, but only by a miniscule 0.4%

This is also despite a growing number of comparison and switching websites that make it easier than ever to switch.

There’s even one that will do the switching for you - WeSwitychU.ie - once you register your details.

CEO Brendan Halpin makes yet another gallant plea with consumers to change their ways.

He is urging everyone to take 5 minutes to look at their electricity and gas contracts to see if they are eligible to switch providers.

“If you’re out of contract, meaning you’re 12 months with the same provider, then switch. It still baffles me how many people stick with the same company every year when the savings they can make by moving are significant. 

“Energy providers bank on the fact that we’re all busy, and moving provider is often regarded as another hassle we can do without.”

“But if you’re prepared to drive to a less convenient supermarket for your weekly shop to save money, why wouldn’t you invest 5 mins of your time into switching energy providers?”

With temperatures dropping and heating systems being cranked up for winter, Halpin says now is the perfect time to review your energy costs.

“With so many people continuing to work from home energy bills this winter are going to be much higher than usual, so save yourself the shock of a bigger bill by ensuring you’re getting the best deal available.”  

‘Shop around’ and “switch and save” are the mantras of personal finance I have been writing seemingly for ever.

And they make sense. You can save a fortune by following them. But it’s getting a bit ridiculous now that we have dozens of services that have been shown to methodically penalise loyalty, penalizing loyal customers in order to disproportionately reward switchers.

One way to look at it is that this is great news for those who take the little amount of time to switch. They can play the system and save a packet.

The prices they are getting are artificially very low simply because so few people bother switching. The ones picking up the tab are those who don’t.

There are probably a dozen different services that could save you thousands by shopping around – TV, broadband, phone, mobile and all kinds of insurance, to name a few.

But many people say they don’t have the time to do all this switching, or maybe it’s the inclination. Suppliers don’t make it easy to leave and dealing with anything that involves numbers is not our strong point as a nation.

WeSwitchU.ie aims to take the hassle out of switching providers. Every year it reviews a customer’s energy consumption and switches them to the best on the market, maximising the savings available. 

Since establishing in March it has saved over €1 million for its customers with average savings of €550 per annum and hundreds of customers pocketing €1000 plus.

It’s early days yet and perhaps having someone do the switching for us will make more people actually do it. There are many such services in the UK.

Another option being looked at is to ban or regulate the anti-loyalty pricing systems that simply puts too much pressure on consumers, not just for energy suppliers but across the board.

Most motor insurance companies, for example, are using controversial “dual-pricing” practices, a Central Bank probe recently revealed.

This means they use the extensive data they hold about us to spot clients who are unlikely to challenge renewal quotes.

As these are less internet-savvy ­people, the system unfairly targets older customers.

Sinn Féin's Pearse Doherty carried out research that found a difference of €740 in the quotes given to drivers who are likely to go elsewhere and those who are not.

An investigation by the UK’s Financial Conduct Authority also found that people who remain loyal to their insurers are seeing prices ratcheted up year after year.

The FCA wants to bring in new rules so customers who renew their home or motor insurance policy to pay no more than they would if they were new to their provider through the same sales channel.

Maybe we should look into following its example and not just for motor insurance.

We could extend the measure to include the seemingly never-ending range of services that see us clobbered with higher prices after a honeymoon period – or at the very least bring in new rules that makes it even easier to switch.