Energy switching website launched

A new energy switching website which promises to keep users on the cheapest deal by constantly monitoring their tariff could finally shift the market in favour of consumers, its founder claims.

Martin Lewis, the founder of MoneySavingExpert.com, hopes the Cheap Energy Club will encourage lethargic consumers to engage with the switching process and eventually "shift the balance of power" after years of short-term cheaper deals and tariff hikes.

The site checks users are on the cheapest deal according to their usage and location and suggests the best alternative for those who are not, before carrying out a monthly "bespoke" comparison and alerting the consumer once their specified savings trigger amount has been reached.

Mr Lewis said the club aims to become successful enough to engage in collective switching, which allows bulk-bought one-off deals offered by intermediaries.

He said the site had required a "massive" technological investment and would be paid a referral fee by most tariffs if consumers used it to switch to one of them, but said those that paid were not placed at the top and comparisons were based solely on calculated results.

The site comes a day before the Government's announcement on energy tariffs and follows a survey that found that 55% of householders have not switched in the last three years, with 22% saying they do not think the benefits are worth it, 17% citing "too much hassle" and 10% complaining that the process is too confusing.

Mr Lewis said: "The energy market is broken, competition is failing, consumers are being shafted and, with continued price rises, the underlying roar of dissatisfaction is growling louder. Many people are confused, scared or disaffected with the idea of switching energy. This is a genuinely political move. This is a very serious play to change the market place."

He added: "Unlike the collective switches we've seen so far, which are focused on one-off short term gains, this is the perfect vehicle to bring together a large group of people to have permanently cheap energy. We will know what tariff you are on and we will tell you when it is time to switch if you are no longer on the cheapest - taking the hassle out of being an energy tart.

"Energy tariffs are currently a form of regressive tax. After all, a money-savvy, active, affluent consumer like me pays less to boil a kettle than a confused, struggling, web-illiterate 80-year-old grandma. Long term, I hope we have a phone service too, helping many disaffected gain courage to get cheaper prices. Of course, there is the chance Cheap Energy Club becomes so huge it could kill the short-term deals markets as energy companies' price models are bastardised when too many people ditch immediately. In itself that'd be a triumph, as it should result in consistently lower prices for more people."

Energy Secretary Ed Davey said: "I thoroughly welcome this initiative from MoneySavingExpert.com and wish it every success. We know switching can lead to massive savings, yet many don't do it. Helping consumers get a better deal on their energy bills is a top priority of the government and we have proposed legislation to ensure that consumers are on the cheapest tariff that meets their preferences. Cheap Energy Club will back up our efforts and so is a really welcome development."