UK energy regulator Ofgem said that the switching rate for gas and electricity suppliers reached more than five million in 2007, as energy customers went in search of cheaper deals, registering the highest level of switching activity in five years.

Ofgem noted that all the major energy suppliers have increased their bills in 2008. The regulator noted that customers who have yet to switch can still save on average GBP92 if they pay by standard credit. Ofgem said that customers can save even more if they also switched to cheaper payment methods such as direct debit.

The energy regulator stated that suppliers losing customers to rivals, is further evidence of vigorous competition in the energy markets. Scottish and Southern Energy has reportedly overtaken E.ON to become the second biggest energy supplier in the UK after British Gas.

Suppliers reportedly continue to compete with tariffs to suit customer needs, including fixed-price deals, online account deals and green electricity tariffs, which together amount to around nine million accounts to date.

Research conducted for Ofgem also shows that certain customers including pensioners, the unemployed and those on low incomes are switching less than other groups. Concurrently, Ofgem has launched a pilot campaign with the non-profit Citizens Advice group to encourage more of such customers to switch to a better deal.