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Consumers continue to ditch uncompetitive energy giants

08 September 2014

Seven out of ten energy switchers opt for smaller providers.

Over the last six months, 71%* of households that have switched energy provider have chosen deals from smaller ‘challenger’ brands, including Extra Energy, First Utility and Ovo Energy. Fewer than a third have taken up tariffs from the ‘big six’ – EDF Energy, ScottishPower, SSE, E.on, Npower, and British Gas.

Table showing proportion of energy switches to either ‘big six’ or smaller energy suppliers over the last six months

February

March

April

May

June

July

Total

Big six

28.17%

27.97%

28.03%

29.10%

29.16%

30.17%

28.77%

Small provider

71.83%

72.03%

71.97%

70.90%

70.84%

69.83%

71.23%



Jeremy Cryer, energy spokesperson at Gocompare.com, said: "Consumers' preference for smaller energy providers over the last six months comes as no surprise, particularly as the UK's 'big six' suppliers have all failed to offer competitive tariffs during that time. If this continues, small energy providers are likely to benefit further from the consumer backlash against the energy giants.

"Currently, Extra Energy and First Utility are both offering combined gas and electricity tariffs with an average annual cost of less than £1,000. These deals, coupled with a growing realisation among consumers that small energy companies can be just as reliable as their big competitors, has clearly encouraged a lot of people to make the switch. 

"At present, just two of the top ten cheapest duel fuel tariffs are offered by big six suppliers, namely ScottishPower and EDF Energy, coming in 9th and 10th respectively. Although customer service, flexible account management, low or no early exit fees, and reputation are all important considerations when choosing a supplier, while consumers continue to face expensive bills, price remains a big deciding factor. And because of this, for now, the small fish are causing big ripples on the pond.

"It's important that people take an active interest in the management of their household outgoings to ensure they're getting good value for their money. When comparing energy tariffs don't focus on the brand, but instead try to establish whether or not you will get the service you want, at a good price.

"Be sure to shop around carefully, as the right provider and tariff for you will depend upon your specific details, including your energy consumption, address, and whether you are happy to manage your account online or prefer paper bills and phone support."

Top ten cheapest tariffs

Supplier

Tariff

Annual cost

Early exit fees

Extra Energy

Fresh Fixed Price Oct 2015 v1

£991

£25 per fuel

First Utility

iSave Fixed v30 October 2015

£992

£30 per fuel

Sainsbury’s Energy

Fixed Price October 2015

£1,009

£30 per fuel

Ovo Energy

Better Energy Fixed (Online)

£1,011

£30 per fuel

Green Star Energy

Rate Saver 12 Month Fixed 1408 Paperless

£1,019

£30 per fuel

Extra Energy

Clear Fixed Price Oct 2015 v1

£1,022

£25 per fuel

Extra Energy

Bright Fixed Price Oct 2015 v1

£1,024

£25 per fuel

Cooperative Energy

Fair & Square October 2015

£1,027

£25 per fuel

ScottishPower

Online Fixed Price Energy October 2015

£1,048

None

EDF Energy

Blue+ Price Promise February 2016

£1,049

None


Based on dual fuel, payment by monthly direct debit, averaged across all UK regions and for households with an annual energy usage of 13,500kWh gas and 3,200kWh electricity (medium user). Correct as of 04/09/2014.

For more information on smaller energy suppliers, read Gocompare.com's com's guide, here: http://www.gocompare.com/gas-and-electricity/small-energy-suppliers/

Gocompare.com's top tariff tips:

  • Sign up online - online tariffs are usually the cheapest option. You won't get paper bills and will be able to submit meter readings and manage your account via your supplier's website or, in some cases, through smartphone apps. If you prefer to manage your account offline be sure to check the small print though, as some suppliers will charge extra for paper bills and telephone support.
  • Combine fuels - if you have both mains gas and electricity, it's worth considering signing up to a dual fuel tariff with the same supplier. It can save you money as energy companies may give discounts for buying both fuels from them.
  • Pay by monthly direct debit - this is the cheapest payment method. However, make sure you supply monthly meter readings to avoid over- or under-paying and potentially ending up having to up your monthly payment significantly.
  • Fix - signing up to a fixed tariff can be a gamble, as you won't benefit from any price reductions, but if it's consistency in energy pricing you're after, these tariffs are for you. Be aware that most suppliers, but not all, charge cancellation fees should you terminate your contract early, though.
  • Shop around regularly - if you find that you could be paying less for your energy elsewhere, switch. Likewise, when you get a letter from your supplier informing you that your current deal is coming to an end, go to a comparison site and compare the tariffs available immediately. It takes around four to six weeks to transfer from one supplier to another, so as soon as you get this letter it's time to look at what other tariffs are available.

-ends-

Notes to editors

*Based on customers who switched energy provider using Gocompare.com between 20 February 2014 and 31 July 2014.