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“Supplier failure protection should have the big six scared”

14 June 2016

Gocompare.com comments on Ofgem’s proposal to introduce protection for customers in the event their supplier becomes insolvent.

Welcoming Ofgem’s proposal to introduce a ‘safety net for customers’ credit balances if their supplier becomes insolvent’, Gocompare.com’s Tom Lewis said; “Small suppliers are becoming increasingly popular options for households looking to save on their energy bills. Our research has found that nearly six out of every ten (58%) energy switchers has turned their backs on the big six suppliers so far in 2016, opting for a smaller supplier instead.

“Historically, one of the few barriers to consumers jumping ship to a challenger energy company is the level of uncertainty around moving to a less-known brand and the security in doing so. As such, Ofgem’s proposal to introduce protection to reassure customers that their in-credit balance will be safeguarded in the very unlikely event their supplier becomes insolvent, should have the big six scared.

“Smaller energy providers are consistently offering better deals than their larger counterparts and hopefully these proposals would give customers peace of mind when shopping around for a new supplier. On average, households could save as much as £207* a year by switching their gas and electricity provider and as confidence in small suppliers continues to rise, we could see the landscape of the energy market change dramatically.”

Gocompare.com has produced a guide on small energy suppliers.

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Notes to editors:

*Based on customers who switched energy provider using Gocompare.com between 1 January 2016 and 30 April 2016.

**At least 51% of customers who provided their energy usage and received a price for switching energy supplier for both gas and electricity with Gocompare.com saved £207 or more (1 October to 31 December 2015).