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As Ovo drops prices, three quarters of consumers would now switch to an energy supplier outside of big six

  • As Ovo today announces the only tariff on market below £1,000 a year, almost three quarters of consumers (72%) would now switch to a small supplier – up from 56% last year and 52% in 2012

  • 78% would make the move to get cheaper energy while 22% would switch to a small supplier for better customer service

  • Less than one in five consumers (19%) would be content to stick with the big six because they are satisfied,down from 22% last year

  • But 31% of consumers would be worried about a small supplier going bust and 23% wouldn’t trust a supplier they hadn’t heard of

  • Missing a trick: 17% don’t believe they would get a better deal from a small supplier, while 12% say they don’t offer as good incentives as the big six.

After years of discontent, service issues and price hikes, consumers are finally awakening to the fact that small suppliers could be a solution. New research from Uswitch.com, the independent price comparison and switching service, shows that almost three quarters of consumers (72%) would now switch to a supplier outside of the big six – up from 56% last year and 52% in 2012. The findings come on the same day that small supplier Ovo lowers its prices, bringing the cost of its Cheaper Energy Fixed tariff down to an average of £998 a year.

The news that people are now more willing to give smaller players a try has been fuelled by smaller suppliers consistently offering market-leading deals. As a result, almost eight in ten consumers (78%) would consider switching away from the big six to get a cheaper deal, while over one in five (22%) want better customer service. The same number (21%) would move to a small supplier for clearer bills. But for some it simply boils down to dissatisfaction – over one in ten (13%) would consider making the move just to get away from the big six.

And there’s even more worrying news for the energy giants. The findings indicate dwindling loyalty amongst big six customers. Last year almost a quarter of consumers (22%) were content to stick with the big six because they were happy with their current supplier – this year the number has dropped to 19%.

However, small suppliers don’t have everything their own way. There are still some fear factors surrounding them that are making some consumers think twice. The biggest concern is that a smaller supplier could go out of business (31%). A quarter of consumers (23%) would be frightened of losing their supply if something went wrong, matched by those who wouldn’t trust a supplier they hadn’t heard of (23%).

While understandable, these fears are unwarranted. In the unlikely event that any energy supplier went out of business, the regulator, Ofgem, would ensure that customers are automatically transferred to another supplier so they do not lose their supply. This safeguard is in place regardless of the size of the energy company.

Consumers are also in danger of missing a trick. Despite smaller suppliers consistently offering better value deals and dominating the ‘best buy’ tables, 17% don’t believe they would get a better deal from a small supplier, while 12% say they don’t offer as good incentives as the big six. One in ten (11%) simply think ‘it’s better the devil you know’, while just under one in ten (9%) say that all suppliers are the same regardless of size.

Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “The tide has finally turned in this David vs Goliath and the big six’s days of market dominance could be numbered. 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.

“The new pricing from Ovo 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 down to triple figures again and hopefully other companies will follow this lead.

“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.”

FOR MORE INFORMATION

Charlotte Nunes

Phone: 020 7148 4664

Email: charlotte.nunes@uswitch.com

Twitter: @uswitchPR

Notes to editors

Research referred to below was conducted by YouGov 3rd – 6th February 2014 amongst 2,232 adults with decision-making involvement with energy suppliers. The data is weighted.  

  1. In response to: ‘Would you consider switching to a smaller energy supplier outside of the big six (British Gas, EDF Energy, E.ON, npower, ScottishPower and SSE)?’ 72% made up of 11% who have already done so and 61% who would consider it.

  2. In response to: ‘What would make you consider switching to a smaller energy supplier outside of the big six? Please tick all that apply’.

  3. In response to: ‘What would stop you from moving to a smaller energy supplier outside of the big six? Please tick all that apply’.

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