New research carried out by Vassaett, an energy think tank, has revealed that the level of competition amongst the big six energy companies has significantly reduced in the past six years.
The number of people looking for better deals and changing suppliers has dropped from 21% to 11.5% since 2006. As a result, the report says that the big six energy companies, which supply close to 95% of the market, are under less pressure to keep prices low.
‘No market has experienced a faster decline in competitive activity’
Chief Executive at Vassaett Dr Philip Lewis, said: “No market has experienced a faster decline in competitive activity, as measured by customer switching, than the once most active market in the world, Great Britain.”
“[Lower switching figures] takes the pressure off the utilities as they are likely to lose fewer customers as a result of price rises,” he added.
Ann Robinson, director of consumer policy at uSwitch agreed: “Competition promotes fairer prices, better customer service and increased efficiency.”
Fewer people looking for better deals
The study reveals a worrying trend as just six years ago, the UK ranked first amongst developed nations for the percentage of consumers shopping around for better energy deals. Part of the reason for the drop is that the big six are no longer using door-step selling.
Energy UK, the trade association for the energy industry, responded to claims that the market was uncompetitive by pointing out that 614,000 consumers switched in November – double the number from the previous month. 125,000 of these switched to an independent supplier.
Angela Knight, chief executive at Energy UK said: “More people are switching energy supplier which is proof that the retail energy market is working well.”