Big shift in preference as 3/4 would now switch to a small supplier
Big six may dominate market share, but small suppliers dominate best buy tables
A new survey from uSwitch finds that 72% of respondents would switch their energy to a supplier that is not one of the big six. This is up from just 56% in 2012.
Currently, the big six — E.ON, npower, British Gas, EDF Energy, ScottishPower and SSE — supply gas and electricity to 95% of the UK’s households.
Yet, for several weeks, consumers have seen small suppliers such as Ovo and First Utility offering the cheapest plans on the market.
“The tide has finally turned in this David vs Goliath and the big six’s days of market dominance could be numbered,” stated Ann Robinson, director of consumer policy at uSwitch. “This is great news for competition and even better news for consumers, who are opening their eyes to the lower prices, better value and often superior service offered by smaller energy suppliers.”
Cheaper or better?
The survey also asked consumers what would compel them to make the jump to a small supplier:
- 78% would switch to small supplier for a cheaper deal
- 22% would switch for better customer service
Though nearly eight in 10 would switch for a cheaper gas and electricity deal, only 17% believed a small supplier could offer a plan cheaper than the big six.
However, UK-based small supplier Ovo Energy currently has the cheapest plan available — a fixed rate deal that is the only tariff available for under £1,000. Meanwhile, small suppliers Flow Energy, First Utility and Spark round out the table of energy ‘best buys’.
Robinson points out these small supplier plans are just the kind of deals consumers could be overlooking:
“[Ovo's plan] is the perfect example of why people should shop around for their energy and seriously consider moving to a smaller supplier. Ovo is an extremely efficient energy company that has customers’ needs at the heart of what it does. As a result it offers both good value and great customer service.
“Hard-pressed consumers should be extremely pleased to see bills back in triple figures again and hopefully the other companies will follow this lead.”
Small supplier concerns
When asked what holds them back from dropping their big six supplier, respondents’ concerns included worries that the supplier would go bankrupt (31%); 23% would have a hard time trusting a provider they had never heard of, and; 23% worried they would lose their energy supply if something happened to a small supplier.
Nine percent simply felt that all suppliers were the same, no matter how large or small.
However, many of these concerns are unnecessary: consumers are protected by energy regulator Ofgem. In the unlikely event a supplier goes bust, regulations ensure customers are moved to another supplier so they will not lose out on energy supply or money.
‘We need … to raise awareness of small suppliers as a viable alternative’
Recent figures made public from DECC found that the big six domination hasn’t changed much in the past five years, while Energy UK states that the number of small suppliers has only increased from 8 to 15 in the past 15 years.
And while Ofgem has recently announced that it will launch an investigation into the competitiveness of the market, Robinson urges customers not shut themselves out from money-saving energy plans:
“But the proof of a pudding is always in the eating, which is why it’s now vitally important for consumers to feel confident enough to give smaller suppliers a try. The suppliers are doing their bit by providing competitive deals, but we need an intensive consumer education campaign from Ofgem to raise awareness of small suppliers as a viable alternative and help consumers overcome any residual fears. This would allow many more to benefit from the fact that they do have a choice.”