Energy suppliers in the UK have committed to halving the length of time it takes to switch providers from five weeks to around two-and-a-half weeks, it has been revealed.
In a statement, the Department of Energy and Climate Change (DECC) announced that the proposals have been referred to the energy regulator Ofgem for final approval.
Energy secretary Ed Davey said that the measure will help customers save money and “improve the poorly performing energy markets” that the coalition government inherited from Labour.
In statistics released last year, supporters of energy market reform claimed that as much as £1.5 billion a year could be saved if people who are spending over the odds on their bills switched to cheaper tariffs.
Ofgem offered their backing to such calls, arguing it would lead to a market fairer for customers.
While acknowledging the difficulties that companies will face in shortening switching times by the end of the year, Davey added that his long-term ambition was to introduce a 24-hour switching system.
Key to this, he said, was the government’s plan to roll out 53m smart meters by the end of this decade.
“But I would urge people who want a better deal on their energy bills to switch now – don’t wait for these latest improvements to happen”, Davey added.
“Over 2 million people switched energy supplier between October last year and March this year, as competition is now hotting up.
“Some of the new smaller suppliers are cutting prices and forcing bigger players to respond, so check out today’s deals.”
As switching increased in recent months, these smaller suppliers have been the big winners.
Renewable energy supplier Good Energy recently revealed that its customer base increased by 32% and its pre-tax profits more than doubled to £3.3m in 2013, as a result of dissatisfied customers of the ‘big six’ suppliers switching.
In February, it was revealed that the big six – which includes British Gas, SSE, EDF and E.ON – received more than 5.5 million direct complaints last year.
Meanwhile, Ecotricity and Good Energy received the lowest number of complaints – with 0.55 and 3.35 per 1,000 customers respectively compared to a collective 20.49 for the big six.
Photo: Tom Page via Flickr