Bill payers to save hundreds as price comparison sites plan 'auto-switching' revolution

Katie Morley
Last year a record 5.5 million customers, or one in six energy customers, switched supplier to save an average of around £200 - PA

Bill payers are set to save hundreds of pounds under an automatic switching revolution being planned by price comparison websites.

A new era in which computers shop around for deals instead of humans, could end a long-standing rip-off in which millions of energy, broadband and phone providers push up prices for loyal customers every year.

Until now so-called "auto-switching" services have only been offered by niche firms but now it is going mainstream as larger firms with millions of customers are adopting the technology, the Daily Telegraph can reveal. 

Under auto-switching customers will be automatically moved onto cheaper tariffs by sophisticated computers, meaning they will no longer face the hassle of physically hunting for deals.

Last night James Daley, director at consumer campaign group, Fairer Finance, said price comparison sites would need to adopt auto-switching "or die”.

Switching utillities provider every year is a hassle faced by millions of households Credit:  Jochen Tack / Alamy

He said: “The market is modeled around consumers being penalised for inertia as most of us don’t have the time or inclination to be switching all the time.” "Price comparison websites have a lot of pressure on all fronts at the moment and they will have to change or die.”

Cocompare, one of the UK's biggest price comparison sites, said it was working on plans to introduce auto-switching, describing it as a "natural evolution" from its current service.

Chief Strategy & Investment Officer at Gocompare, said: "Automatic switching is a natural evolution of the way things are done today. It could make it really easy to find not only the best price and the best product, but for that that to happen in a way that will save time, as well as money. 

"I'd be very surprised if we don't see auto-switching going mainstream within the next few years. For it to work it has to be brilliant for consumers and also brilliant for suppliers. Everyone has to win out of it."

Rik Smith, a commercial manager Uswitch said: "We are always looking at opportunities in the market and it would be remiss if we weren’t looking at other ways for our customers to save money.”A spokesman at Moneysupermarket said: "We aim to make switching as easy as possible and support further developments in the sector."

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Another smaller switching service The Big Deal, which has around 400,000 customers, has just launched an auto-switching service called Look After My Bills. Britain's biggest energy companies have signed up to the service which is free for consumers to use. It earns a commission of around £45 from the supplier each time someone switches.

Comparethemarket said it had no plans to introduce auto-switching because its customers preferred to "be in control" of the process.

Auto-switching services will first be introduced for basic utilities like gas and electric and broadband where price is the main variable. Later, more complex products like insurance which come with a range of options and services could be added. 

Once customers hand over their details a computer algorithm identifies the right moment to switch them onto a cheaper deal. It then looks up the best deal for the customer through a comparison engine. 

Customers could find they are moved onto new providers more than once a year as computers can calculate whether the difference between someone's current provider and the cheapest exceed early exit penalties.  

It comes after energy regulator Ofgem announced it will trial a collective switching service to move customers on the worst deals onto better value tariffs.

Last year a record 5.5 million customers, or one in six energy customers, switched supplier to save an average of around £200.