Gas and electricity Updated:
The big six have repeatedly come under fire over the last few months, namely over their seemingly endless commitment to increasing prices. Well, it looks like customers have had enough, and many have spoken with their feet – a huge number have switched in favour of smaller, independent suppliers, with the big six rapidly losing market share.
Latest figures show that, over the last five years, larger suppliers have seen their share of the market drop from 99.8% to 92.4%. Conversely, smaller suppliers have seen their share increase, rising from just 0.2% to 7.6% over the same five-year period. In numeric terms, this equates to 3.8m accounts with the smaller suppliers, and 45.9m with the big six.
The figures, from independent research group Cornwall Energy, show just how rapidly smaller suppliers are gaining market share. They may not have a stronghold on the market yet, but considering how small they are in comparison with the big six, it's a significant turnaround.
The findings come just as the UK's largest independent supplier, First Utility, announces that it's become the first independent to surpass the one million customer account milestone. It's no wonder they're becoming such a challenge to the big six –according to their calculations, customers switching to them could save an average of £213 per year.
They're not the only supplier to be gaining popularity, either. The next biggest independent, Utility Warehouse, has around 835,000 customer accounts, and in total there are now over a dozen suppliers available – a figure that's almost trebled since 2010, according to The Department for Energy.
The increase in suppliers, not to mention the growing popularity of independent companies, will ideally mean that the big six will further lose their hold of the market. Energy secretary Ed Davey said that "with over two million customers now signed up to independent suppliers overall, it's clear that households increasingly trust them and are benefitting from competition in the market" – and it's hoped that the current investigation by the Competition and Markets Authority will improve things further.
In the meantime, it could be worth considering your energy options. Smaller suppliers are known for offering much cheaper tariffs than their larger counterparts, so isn't it time you followed in the footsteps of other customers and looked elsewhere?
Mark Todd, director of independent price comparison site energyhelpline, commented: "Many customers have left big suppliers for smaller ones since the price rises in the autumn, and two thirds of customers currently switching through energyhelpline are opting for a smaller supplier.
"When you look at the prices of the best deals from the smaller suppliers compared to the bigger suppliers, it is no surprise that informed customers are generally choosing the smaller players. The four cheapest long and short fixes are all offered by smaller suppliers."
Given that there are so many alternatives to the big six these days – and that they're generally offering much cheaper tariffs – it could be time to compare the options. Use our handy comparison tool to see how much you could save, and you could cut your bills down to size before any further price hikes make themselves known.
Find the best Gas and Electricity prices
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.