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The cost of living: energy

Summary

  • Many consumers have already experienced energy price increases, and the vast majority are worried about energy prices.

  • Consumers whose energy supplier has recently gone bust are more likely to be very worried about energy prices.

  • Consumers had mixed views about the success of their transition to a new supplier.

Consumers are already reacting to energy price increases

Energy prices have been a major topic of discussion in recent weeks.  Major increases in gas prices have driven up the energy price cap. Our data has shown that many consumers (46%) have already been impacted by increasing energy bills. Although rising energy bills are already fairly widespread, the impact on consumers is likely to increase significantly as further increases are predicted into next year. 

Unsurprisingly in the face of these headlines, the vast majority (78%) of consumers said they were worried about energy prices in October. A large proportion of consumers have begun to change their behaviour in response to, or in anticipation of, rises in energy prices. A little under half (44%) said they had tried to use less energy in their home in response to rising energy prices, whilst a fifth (18%) said they were checking meter readings more regularly to monitor their usage. Just under a fifth (17%) had shopped around for a better deal and 9% had installed a smart meter to monitor their energy usage. A large minority (38%) had not done any of these things.

Consumers whose energy company has gone bust have been particularly affected

In the face of steep increase in wholesale energy prices, more than a dozen  energy suppliers have gone bust in recent months. Just over a tenth (12%) of our sample reported that their household’s energy company had gone bust in the last two months. Those who had experienced this were more likely to be very worried about energy prices (47% compared to 35% in the sample as a whole). The majority in this group have also already experienced an increase in the price they pay for energy  (63% compared to 46% in the sample as a whole, even though many supplier closures have been very recent).  

Consumers are automatically switched to a new energy supplier when their supplier goes bust. Cost aside, we also explored consumers’ experience of the process of having been switched to a new supplier, drawing on responses from 256 consumers whose suppliers had gone bust in the last two months. 

More consumers have had a positive experience of this process than negative, although the process could have been better for a sizable minority. Half of consumers (50%) whose supplier had gone bust either strongly or somewhat agreed that the transition to a new one had been smooth, whilst 17% disagreed. A substantial proportion (13%) said they didn’t know if the transition had gone smoothly, perhaps indicating that they have had little communication about the transition as of yet. Three in ten (30%) consumers disagreed that they had been given all the information they needed about the transition to a new supplier.  Only half (50%) said they had been given all the information they needed. That being said, many of the collapses in energy companies have been very recent: 38% of those who reported their supplier going bust said that this happened in the two weeks prior to answering the survey. Lots of their customers will likely still be awaiting communication from their new supplier, and have yet to find out the impact on their energy bills.

Conclusion

Nearly half of consumers have already felt the effects of energy price increases. However, predictions suggest that the worst is yet to come, with further increases in the cost of energy set to be felt by consumers in the coming months, and more firms expected to go bust. Consumer worries reflect this, with the vast majority expressing concern about energy prices. Alongside rising prices and shortages of other goods, it’s looking like a hard winter ahead for consumers.

Methodology

The fieldwork was conducted by Yonder on behalf of Which between 15th and 17th October 2021. A nationally representative sample of 2,129 consumers was surveyed.

Contact us

If you have any questions or would like to find out more, please email Sophie Beesley at consumerinsight@which.co.uk

Published on 28.10.21

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