70% of energy customers switch to small providers

8 September 2014

Seven out of 10 households that have switched energy suppliers in the past six months have chosen deals from smaller companies, according to comparison site GoCompare.com.

Smaller 'challenger' brands such as Extra Energy, First Utility and Ovo Energy are picking up customers, while fewer than a third have taken up tariffs from the Big Six energy suppliers – EDF Energy, ScottishPower, SSE, E.on, Npower and British Gas.

For example, in June 2014, 30% of consumers who switched supplier moved to one of the Big Six suppliers, while just under 70% moved to small providers.

Currently, only two of the Big Six energy providers feature in the comparison site's list of top 10 dual fuel energy suppliers: Extra Energy and First Utility come in at ninth and 10th position respectively.

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Deciding factors

Jeremy Cryer, energy spokesperson at GoCompare, said: "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."

He added: "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."

The comparison site offers the following advice for anyone looking for a new tariff:

  • Sign up online – online tariffs are usually cheaper. 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, check the small print as some suppliers will charge extra for paper bills and telephone support.
  • Combine fuels – if you have both mains gas and electricity, consider signing up to a dual fuel tariff with the same supplier. Energy providers may give discounts for buying both fuels from them.
  • Pay by monthly direct debit – this is the cheapest payment method. Supply monthly meter readings so you don't under-pay and end up having to raise your monthly payment significantly. Check out fixed deals – with a fixed tariff, you won't benefit from any price reductions but consider these tariffs if you prefer a consistent energy price. Most suppliers, but not all, charge cancellation fees if you terminate your contract early.
  • Shop around regularly – if you could pay 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 switch suppliers, so as soon as you get this letter it's time to look at other tariffs.

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