- Small and medium sized suppliers’ market share at record high as more people switch to get a better deal
- Largest suppliers under pressure to offer better deals or risk losing more customers
- Ofgem will make it easier for people who switch and protect those who don’t
Over one in five energy consumers are now with small and medium sized suppliers, as more people switched to get a better deal last year.
This has left the six largest suppliers’ combined market share at a record low.
Last year, 5.1 million electricity consumers and 4.1 million gas consumers in total switched supplier, the highest number for almost a decade.
More than a third of these consumers switched from one of the six largest suppliers to rival companies. Many of these customers were switching for the first time.
The number of consumers with a small or medium-sized energy supplier reached a record high last year, continuing a sustained, long term movement away from the six largest suppliers.
In December last year, smaller and medium sized suppliers were supplying 21% of consumers for electricity and 22% for gas in December last year. In 2013 their market share was 4.7% for electricity and 5% for gas.
The six largest energy suppliers’ market share stood at 79% for electricity and 78% for gas in December 2017, down from 84% for both gas and electricity at the end of 2016.
While more people are switching to get a better deal, those who have never switched or rarely do so are still being overcharged.
Around 57% of non-prepayment meter consumers are on poor value standard variable rates, which can be as much as £300 more expensive than the cheapest deals on the market.
Ofgem is working to make switching easier, quicker and more reliable to help more people save money, particularly those on the worst deals, and this month launched the first-ever “simplified” collective switch.
Ofgem is also protecting those who don’t switch from being charged too much. Earlier this month the regulator extended the safeguard tariff, which already protects 4 million prepayment households, to almost 1 million more vulnerable consumers.
The regulator is working with the government to put in place a wider price cap to protect all consumers on the worst deals from being overcharged.
Consumers who are protected will still be able to save even more money by switching to a cheaper deal.
They might also want to switch to benefit from a range of new “smart” or digital products and services coming onto the market.
Dermot Nolan, chief executive of Ofgem, said: “The largest suppliers are under pressure as more consumers switch away to small and medium sized suppliers.
“With more customers voting with their feet, the message is clear: suppliers need look at what they are offering to their customers or risk losing them.
“Nevertheless, there are still too many consumers who are paying too much for their energy, which is why we are introducing price protection whilst we reform the market, to make competition work for all consumers.”
Notes to editors
- Ofgem has today updated its energy retail market indicators for switching and tariff prices.
- Updated market share figures for individual suppliers will be published in April.
- There are around 28 million electricity and 23 million gas meter points (referred to as consumers in this release) in Great Britain. Many of these take their gas and electricity from the same supplier, with on average 70% of electricity customers, and 80% of gas customers, having dual fuel accounts.
- Ofgem’s data on number of customers switching by fuel type is based on the number of meter points a supplier gains from another following a customer choice to change their supplier.
Please note that the number of electricity and gas switches does not equate to 9.2 million individual customers switching, as many of these will be dual fuel customer switches, and also because some customers may have switched more than once during the year.
- Switching rates measure the total number of switches that have taken place in a 12-month period against the average number of meter points.
- As of 28 January 2018, the cheapest dual fuel deal on the market was £820 per year, and the average standard variable tariff on offer from one of the six larger suppliers was £1,135 per year. For the evolution of this differential over time and an explanation of the methodology used for this calculation please see the price comparison indicator on our website
- As of October 2017, 57% of non- on non-prepayment meter domestic customer accounts (approximately 13 million) and 62% of all domestic customer accounts (approximately 17 million) are on standard variable tariffs. These figures refer to data for the 10 largest suppliers and are based on the latest data submitted by suppliers, as of October 2017. For an explanation of the methodology please see the non-prepayment domestic customer account indicator on our website.
- Ofgem announced on 12 February that it is launching reforms to help more people switch supplier. This includes trialling “simplified” collective switching, trialling offering cheaper deals by letter or email, and launching a programme that will allow consumers to switch by the end of the next working day.
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