Customers have the ability to save hundreds of pounds by switching energy supplier and comparison sites have played a major part in making this achievable. They find the latest tariffs from the 50 or so suppliers in the UK; update their systems pretty much straight away and facilitate the switch over process.
Auto-switching companies are the next step in the evolution of energy comparison sites, to find and switch you to a supplier automatically when your current tariff ends, so you don’t have to manage any aspect of it. But as the system is still in its early stages, it may not be ideal for everyone at the moment.
Here, we look at the pros and cons of using auto-switching comparison sites for changing energy companies.
What is energy supplier auto-switching?
Auto-switching is when comparison sites not only compare tariffs available to you, but automatically switch you to a supplier based on your preferences. They can find and switch you to green tariffs or those that offer discounts for your household circumstances. They can even send your direct debit details if you have chosen that as a payment method.
How does auto-switching work?
Because the switching process is done automatically, the comparison site registers you with them and takes information such as an address, bank details if paying by direct debit and any preferences for tariffs. It then searches and switches you to a tariff it feels match your requirements and continue to switch you in the future.
Some companies wait until a tariff has ended before automatically switching you over to another one. But others constantly look for a better deal throughout the year and switch you, taking into account any exit fees. They will usually let you know about the intended switch and give you 14 days to change your mind.
Is there a fee for an energy auto-switch service?
There are free and paid versions of the auto-switching and some companies do both. The free service doesn’t always include the whole of market results, just like normal comparison sites. The paid-for services (usually £30 per year) don’t need to rely on commission from suppliers so they tend to include all tariffs, which will save you the most.
What are the benefits of auto-switching?
- Prevents information overload. With so many suppliers in the market, each with a dozen or more tariffs, when the time comes to switch, it can quickly become a case of information overload and you may not even know where to start. The auto-switch energy service takes this stress away from you and manages the process every year.
- You find cheaper suppliers at the right time. Many customers end up on the standard variable tariff with an energy supplier simply by forgetting to make the switch themselves in time. This costs them extra money while finding and going over to a cheaper supplier. This money can be saved by auto-switching when the cheap tariff ends.
- No or low cost of auto-switching for customers. The cost of using an auto-switch service is either free or cheaper than not switching at all or leaving the switch too late when comparing suppliers yourself. Most companies will only auto-switch if you will make a saving of at least £50 so it works out cheaper.
- No need to contact the new supplier. The auto-switch service sets up the account with the new supplier including your payment and meter details so you don’t have to contact them. If you have a smart meter, they can even give the meter reading to the new supplier; otherwise you will have to provide it.
- You can set preferences for companies to switch to. You can still control which supplier you are switched to by setting preferences such as: big companies only, customer service rankings, green tariffs, warm home discount only suppliers etc. You also have 14 days to change your mind if you don’t want to go ahead with the change of supplier.
- They search all tariffs from all suitable suppliers. The paid versions of auto-switch sites compare the whole of the market searching for all available tariffs, unlike some normal comparison sites that may leave out suppliers and tariffs they can’t get a commission for.
The cons of auto-switching energy services
- Because there is a charge for this service, you could save this money by comparing the best tariffs yourself each year. The £30 annual cost of auto-switching may be saving you around a half hour to an hour each year. You are usually notified 6 weeks in advance of the current tariff ending so you have all this time to search for a better tariff yourself.
- The free auto-switch services take a commission from the energy supplier and so may not show you the very cheapest tariffs available. There are a few suppliers who do not pay a commission at all to comparison sites and they may be left out of the results.
- Having a tariff chosen for you may not be the cheapest deal available. Once you have paid for the service, you have the tendency to just leave the admin work to them so you won’t know whether you are really benefitting from the switch.
- Depending on your preferences, you would not be able to use the full service of auto-switching. By choosing warm home discount only tariffs for example, you will be limiting the search results and many functions are similar in normal comparison sites.
- The saving may not be as great as you had hoped. Because the minimum saving is £50 for you to be switched, you may not save all that much each time and also find that in one year, you have been with two or three different suppliers.
- Changing supplier more than once in a year means you don’t always have accurate yearly usage information to be able to compare with another tariff. The solution to this may be to only compare usage in kilowatt hours rather than amount of payments paid.
Conclusion
There are some negatives to auto-switching such as the annual cost of the service and whether you as the customer could find something even cheaper with a bit of legwork yourself, especially as it doesn’t take that long to find a better deal.
But as a relatively new concept in comparing energy deals, auto-switch sites have definitely filled a space in the market and made it easier for many customers: especially those who are not computer literate and have no one to help them, or don’t have the time to search each year; to find cheaper gas and electricity deals and save some money. They are likely to expand and soon many comparison sites could follow this method.
If you want to see for yourself how this works, the links below take you to two of the biggest names in auto-switching energy deals Lookaftermybills and Switchd.
