The UK's 'Big 6' energy companies are losing customers to their smaller rivals at such a rate that they will control less than 50% of the residential market in 2019, according to UKPower.co.uk.
The energy price comparison site says that three quarters (74%) of switchers now choose a cheaper tariff from a smaller company – such as Ovo Energy or First Utility – rather than paying a premium to one of the more-established brands (British Gas, Scottish Power, Npower, E.on, SSE & EDF Energy). As illustrated in this table of switches taking place through the UKPower.co.uk website since 2011, the percentage of people opting for a smaller independent supplier has risen sharply from just 1% in just three years.
According to Energy UK, over 250,000 people now switch their energy company or tariff every month, with the market share held by the major suppliers subsequently having dropped below 95% for the first time in January 2014.
Scott Byrom, energy expert at UKPower.co.uk, commented:
“Even with the current switching volume, the balance of power is shifting away from the Big 6 at an alarming rate. It's about time they ditched meaningless claims about having the cheapest 'standard' tariffs and actually offered something competitive. Customers are clearly fed-up about being overcharged and are voting with their feet.”
None of the Big 6 companies (at the time of writing) appear in the Top 10 Best Buy table for one year fixed tariffs: a hotly-contested battleground for customer acquisition with First Utility joining Ovo Energy in the past week to offer sub-£1,000 energy deals. This compares to an average annual bill of £1,198 – or £200+ a year more – for customers on a standard variable tariff from the Big 6 suppliers.
Byrom continues: “Switching sites are a pivotal platform for any smarter supplier outside of the Big 6, enabling new entrants to get their brands off the ground with no upfront marketing costs. Meanwhile bigger suppliers are encountering very little engagement from consumers actively looking for a better deal, of which there is a rapidly growing number.”
To see the top 10 cheapest fixed rate energy tariffs, visit UK Power's website (part of the Make It Cheaper group) at www.ukpower.co.uk/home_energy/fixed-rate-tariffs.