What is a collective switch?
A collective switch is when a group of customers club together to switch to a better-priced energy tariff from the same gas and electricity supplier.
A group can often negotiate a better deal than an individual household, so signing up to a collective switch to change utility supplier can potentially save you even more money than switching as an individual.
These collective bargaining schemes first came to prominence back in 2012 when the Department for Energy and Climate Change (DECC) launched the £5 million Cheaper Energy Together fund to support the development local authority and third party collective energy buying and switching.
The scheme was introduced to help encourage switching among vulnerable customers and those who had become disengaged with the energy market, who might be stuck on expensive standard variable rate tariffs.
UKPower was among the first price comparison websites to run a collective energy switch, and has run several more since, the last of which managed to cut our customers’ dual fuel bills by an average of £292 a year.
If you’re apprehensive about signing up to a collective energy switching scheme, there’s really nothing to worry about – we only need a few details to switch you to an exclusive energy deal that will knock hundreds off your annual energy bills, it really is that simple.
And remember, you don't have to sign up to a collective switch to get a great deal on domestic gas and electricity - compare energy quotes now to see how much you could save on your current deal.
How does collective switching work?
There are typically four steps to involved in setting up collective energy deals:
This is a limited time frame during which you have the chance to express an interest in taking part in the collective energy switch. It’s unlikely you’ll be told how much money the group switch will save, as this stage is purely to gauge demand and deals are then negotiated after all participants have registered.
If you’d like to register your interest in UKPower’s next collective switch, click ‘YES’ in this collective switching poll.
It’s worth remembering that even after you register for a collective switch, you are not under obligation to actually go through with the switch at the end of the process.
Once the registration period is up, an auction is held with energy suppliers, in which they bid for the collective group’s custom. Suppliers will often put forward cheaper deals during this auction than are typically offered on the market, as the collective buying power is worth more to them than individual switchers alone. This auction is the reason that collective switchers commonly end up with market-beating energy deals, as suppliers are bidding head-to-head.
3. Personal offer
Once the auction is completed, you will then receive a personal offer, which will give more details about how much the collective switch might save you over the course of the deal. The rate you’re offered will most likely be a 12-month fixed rate tariff, based upon your individual consumption habits and the best offer from the auction.
Even at this point, you still don’t have to accept the offer if you don’t want to.
4. Acceptance period
This is a set period of time you’ll be given to decide whether you want to take part in the collective switch, and accept the deal offered to you. Typically, the acceptance period will last a few weeks, giving you plenty of time to weigh up your options and make sure you’re getting the best deal available.
Is a collective energy switch right for you?
This all depends upon your personal circumstances, and collective switches often work best for groups of individuals who have similar needs and goals.
For instance, if you’ve never switched energy before, and you’re stuck on an expensive rate, a collective switch that targets people who are disengaged with the market could offer the ideal solution. If, on the other hand, you’re a seasoned switcher, you might find the deal offered in the same collective switch isn’t as competitive as one you’ve found by running an individual quote.
If you live in a rural area, where distribution costs can lead to higher energy bills, the collective purchasing power of a big community switch could see you negotiate a better deal than you’d get by running individual quotes. Again though, if you’re not part of this group, say you live in an urban area, you may find the savings you’re offered aren’t worth signing up for.
In any case, it’s always worth registering an interest in a collective switch, to see what sort of deal can be negotiated on your behalf, which you can then use as an extra comparison when running quotes online.
What else should you know about before signing up to a collective switch?
It’s sometimes the case that organisations decide to arrange a collective switch for consumers to sign up to, which is referred to a collective switching scheme. For instance, energy price comparison websites have been known to do this in order to utilise their industry knowledge and standing negotiate a deal on behalf of their customers.
Remember, the government is in full support of collective switching – Ofgem, the energy regulator, has recently run a trail collective switch of 50,000 customers that saved a total of £3.3 million – and if you’re considering a collective or community switch, DECC suggests you get answers to the following questions, for complete peace of mind:
- Is this collective switching service free of charge?
- Are you obligated to switch once you sign up?
- How long will the whole process take, from registration to acceptance to final switch?
- When do you need to sign up by?
- How soon will hear back with details of the deal?
- How can you be sure the collective offer is better than your current plan?
- If you’re already on a fixed plan, will you have to pay an early exit fee?
- Can you switch if you’re in debt to your current supplier?
- Will the terms and conditions of the deal be made clear?
- Which suppliers are being targeted or expected to bid?
- Will your information be safe? Will it be given out for other uses?
- What are the options on bill payment methods?
A collective switching scheme may have different features than a collective switch organised by the consumers themselves, for instance different deals negotiated for those in different regions of the UK. The advantage of signing up to a collective switching scheme is that not only do you, the consumer, have to do very little in order to take part and make the most of getting a better energy deal, but you can also trust in the organisation to hold the auction and negotiate on your behalf.
Collective switching with UKPower
Signing up to a collective switch and switching to a better deal with UKPower is completely free of charge, and you’ll be under no obligation to switch at any point until the acceptance period, which is the last stage in the whole process, when we’ll need your permission to switch you to the group deal.
If you’re already on a fixed plan that charges an early exit fee, you’ll have to pay this when you switch unless your current deal has less than 49 days left to run, in which case you can switch completely free of charge. It may be the case that your current deal doesn’t impose any early exit fees, meaning you’re free to switch as and when you please, without penalty.
If you’re in debt with your current supplier, it is possible they might block the switch. You can find out more at Can I switch my energy supplier?
And you can be sure any information you provide us will be kept safe, and won’t be used for anything other than getting the best collective deal. At UKPower, we take your privacy and preferences seriously, so we promise we won’t share your details with others for marketing purposes.