Research from Cornwall Insight’s ‘Domestic supplier insight service reveals the gap between the cheapest tariff on the market and the default tariff price cap has reduced to its lowest level since February 2019, standing at £219/year. This is 40% less than at the end of April 2020 when it was £368/year.
Kate Hill, Senior Analyst at Cornwall Insight, said:
“This reduction in the gap is a result of the lower default cap introduced in October and rising fixed tariffs due to increased wholesale and network costs.
“The savings available to customers and variations in the level of the default tariff cap, together with changes to the tariff market, play a large part in energy switching. These were the key drivers that led to record levels of switching recorded in April 2019.
“According to Energy UK’s electricity switching statistics for October, switching was down 6% on October 2019 and is the lowest switching seen in an October since 2016. This narrower gap will have reduced the savings customers will see from switching will have and no doubt dampened the numbers of consumer switching deals.
“Increased awareness of consumption in the winter months have been triggers for seasonally higher levels of supplier switching in previous years. While the switching rate seems to have dampened, the trajectory continues to follow a seasonal pattern which would usually see increases through to November. We would then expect switching to peak again in March/April 2021.
“With 11mn consumers estimated to be on default tariffs under the domestic tariff cap, there are still significant savings to be had. It would be wise for customers to check their deals to see what tariff they are on.”