Consumers urged to ditch the ‘big six’ as small suppliers dominate the energy best buy tables
Consumers are being urged to make a new resolution to get a more competitive energy deal, and to start looking outside of Britain’s big six suppliers in order to do so. The call comes as npower pulls its cheapest plan, meaning the five cheapest energy plans on the market now all come from smaller suppliers.
Of the big six suppliers, EDF Energy is the cheapest. But while its Blue + Price Promise costs £1,182 a year, Sainsbury’s Energy has the cheapest deal on the market at £1,123 a year – £59 a year cheaper. Sainsbury’s is closely followed by First Utility, at £1,150 a year, and Co-operative Energy at £1,157 a year. However, unlike the EDF Energy plan these deals are variable, which means that while cheap today, the price could increase in the future.
But even those who like the security of a fixed price plan could still benefit from moving to a small supplier. First Utility’s iSave Fixed v6 offers price protection until the end of March 2014 and costs £1,170 a year. Ovo Energy’s New Energy Fixed plan comes in at £1,172 a year – £10 a year cheaper than EDF Energy’s Blue plan – and offers 12 month’s protection. However, both of these plans carry early exit fees, which the EDF Energy plan doesn’t have. And while EDF Energy’s Blue is slightly more expensive, it also offers the longest price guarantee – customers are protected from price hikes until the end of June 2014.
But while new suppliers are competing hard, there is a reluctance amongst householders to try one out. Uswitch.com research shows that, despite widespread disillusionment, just 52% of energy customers would switch to a supplier outside of the big six. However, over three quarters (77%) would consider moving to a smaller supplier for cheaper energy, 32% for better customer service and 28% for clearer bills – some of the benefits small suppliers already offer.
The biggest fear factor stopping consumers from moving to a smaller supplier is the worry that it could go out of business – over a third of consumers (35%) say that this concern would stop them from switching. Almost three in ten (28%) would be frightened of losing their supply if something went wrong with the company, while over two in ten (22%) wouldn’t trust a supplier they hadn’t heard of.
While these fears are understandable, they are also unfounded. In the event that any energy supplier went out of business Ofgem, the regulator, would ensure that its customers are automatically transferred to another supplier (the supplier of last resort) so that they do not lose their supply. This safeguard is in place regardless of the size of the energy company.
Tom Lyon, energy expert at Uswitch.com, says: “This is the year for consumers to ‘think outside of the big six box’ and to really consider moving to a small or new supplier to meet their energy needs.
“There is now a real mix of suppliers from the genuinely small and independent, to well-known retailers that are taking their first steps into the energy market. Some are offering a genuine alternative to the big six, while a couple are being backed by one of the big six. But the fact is that consumers now have a bigger, better and more competitive choice than ever before.
“With prices having just increased and with winter fuel bills on the way, I would urge consumers to take advantage of this situation and to shop around for a better deal today.”
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Sainsbury’s Energy
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Price Check January 2014
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£1,123
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First Utility
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iSave v14
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£1,150
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The Co-operative Energy
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Pioneer
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£1,157
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First Utility
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iSave Fixed v6
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£1,170
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Ovo Energy
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New Energy Fixed
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£1,172
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EDF Energy
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Blue + Price Promise June 2014
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£1,182
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npower
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Energy Online August 2014
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£1,184
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British Gas
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Online Variable Feb 2014
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£1,193
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ScottishPower
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Online Fixed Price Energy September 2014
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£1,195
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Spark Energy
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Standard
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£1,197
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Notes to editors
Based on a medium user consuming 3,300 kWh of electricity and 16,500 kWh of gas on a dual fuel tariff paying by monthly direct debit with bill sizes averaged across all regions.
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)?’
In response to: ‘What would make you consider switching to a smaller energy supplier outside of the Big Six (British Gas, EDF Energy, E.ON, npower, ScottishPower and SSE)?’
In response to: ‘What would stop you from moving to a smaller supplier outside of the Big Six?’
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