logo-rebrandphone Skip to main content

Switching to a small energy supplier

Switching to a small energy supplier

You can switch to a small energy supplier with Uswitch — but not all small suppliers are created equal. Here's what you need to know about small energy suppliers before you switch.

Compare energy prices here

It's a good idea to compare energy regularly to see what the latest prices mean for you, even though there are fewer deals available. Enter your postcode to get started.

History of small energy suppliers

In 2006, there were only 10 energy suppliers to choose from, including the so-called big six (British Gas, ScottishPower, EDF Energy, E.ON, npower and SSE). Today, there are more than 50 gas and electricity providers able to supply your home, leaving consumers to navigate not just plan options, but supplier options as well.

Many of the challenger energy suppliers have entered the market since 2013, when energy regulator Ofgem unveiled its plans to 'create a more level playing field' for small suppliers in an effort to shake up the market and pave the way for more competition.

Small energy suppliers are now serious contenders to the big six, offering some of the cheapest energy deals on the market - and many score highly in customer service ratings too.

But while the new entrants have undoubtedly provided much more choice, many consumers are worried about making the wrong choice when it comes to small energy suppliers. There has been an increase in small suppliers going out of business, so it is important for consumers to research a potential new supplier before signing up.

What is a 'small energy supplier' anyway?

First, the basics: the term "small suppliers" — sometimes referred to as "independent suppliers" — is generally used to describe any energy supplier that is NOT the big six, which provide energy to around 70% of the UK's households.

These small suppliers generally have 250,000 customers or fewer, though some larger independent suppliers, like OVO Energy and Shell Energy (formerly known as First Utility), are more established and have several thousand more.

The pros and cons of small energy suppliers

Pros

Small suppliers are able to offer cheap energy deals because they have smaller overheads than more established suppliers. They are also not held to the same costly obligations that large suppliers are, such as paying into government schemes like ECO.

You might also find that small suppliers are able to be more innovative without the red tape that can hold larger suppliers back. Many small energy suppliers are leading the way in green energy and technology that makes it easier to manage your accounts.

Cons

While many new suppliers have entered the market in recent years, some have failed to last the distance. A small energy supplier might struggle to survive financial difficulties in comparison to a more established supplier. This is more likely to be the case over the next few months as the well-documented high wholesale prices situation forces smaller suppliers who have less cash to cover themselves with out of the market.

What if my small energy supplier goes out of business?

While historically many small suppliers have operated without issues, as noted above, a higher percentage are likely to exit the market in the near future.

However, you can rest assured there are rules to protect your household against any energy supplier going bankrupt. Energy regulator Ofgem has enforced a number of regulations and, should there be a problem, you will be switched to a new supplier. This will have no impact on your energy supply. You can find out more in our guide.

Do small energy companies have good customer service?

Many smaller suppliers have been ranked more highly for customer service than their big six competitors.

In the latest independent Uswitch survey of more than 17,000 UK energy consumers, households rated their suppliers in categories including customer service, value for money, transfer process and likely to recommend. Eight suppliers received the top score of 5 out of 5 stars in the best energy customer service 2021 customer ratings guide — and none of those were big six companies.

How can I find out more about each small energy supplier?

If you run an energy comparison through Uswitch, information about the supplier is provided in your results on the Plan Info page.

This information includes when the suppliers were established, any warnings such as advance payment requirements and, where available, an independent customer satisfaction score.

We also provide a guide to energy suppliers, which contains an array of information about many energy providers (both large and small) currently available on the market.

You can also use trusted user review sites like TrustPilot to read real experiences and feedback from customers of any given supplier.

Should I switch to a small energy supplier?

In years gone by, the short answer would have been that gas and electricity is all the same whichever supplier you choose. What you're really paying for is the supplier — their customer service, their account management and any rewards and extras they offer — so it's important to know a bit about them before taking the plunge. However, this now includes some risk assessment about whether they're likely to go bust.

So, in short, small suppliers can offer some great deals and have great reviews from customers — just be sure to look past just the low price.

Compare energy prices here

It's a good idea to compare energy regularly to see what the latest prices mean for you, even though there are fewer deals available. Enter your postcode to get started.

Read more …

Share this article