Energy bills cut by £131 through collective switching

More than 21,000 people saved an average of £131 on their electricity bills, according to a report released today by the Department of Energy and Climate Change. Consumers used collective switching - where they organise together to negotiate with their electricity providers, usually facilitated by a third party.

The report, "Helping Consumers Switch: Collective Switching and Beyond" examined 27 collective switching initiatives and found that households who participated in the scheme saved a total of £2.7m.

The effects of collective switching were particularly dramatic in Nottingham where the average household saved £225. As well as reducing energy bills, the report found that the customer base for smaller independent suppliers boosting competition in the retail energy market.

Secretary of state for energy and climate change, Ed Davey said:

Up and down the country, collective switching schemes have saved people money and increased engagement in the energy market. Collective switching gives power to communities by bringing people together to find the best deal for them.

It’s fantastic news that over 16,000 households saved an average of £131 on their bills through collective switching. We must now look and how we can replicate the success of these pioneering schemes and get more people to take part.

The report finds that there are still significant barriers for consumers switching to the best available deal including complexity of energy tariffs.The government is hoping to facilitate more collective switching initiatives to help consumers drive down their energy bills.
The government has struggled to find a coherent narrative with regards to the cost of energy in the wake of Ed Miliband's proposed price freeze. The new report will strengthen the argument that there are ways to significantly reduce energy bills through switching and rolling back green levies instead of fixing prices. 77 local authorities are due to implement collective switching schemes.