If your fixed gas and electricity tariff has recently come to an end, your supplier may have automatically switched your supply to a more expensive roll-over tariff. According to uSwitch.com, sixteen popular fixed tariffs came to an end during the first week of October, so now is the perfect time to switch to a better deal.
Last year’s winter price hikes saw the ‘big six’ energy suppliers – British Gas, npower, Scottish Power, SSE, E.ON and EDF – increase electricity and gas prices by nearly 10%. A year on, the wholesale price of gas has fallen by nearly a fifth and electricity rates are also down. Problematically, the top suppliers are failing to pass these savings onto their customers.
“As a result some people could pay as much as £193 more. So now is the perfect time to switch and save money before the cold weather starts to bite,” says Tom Lyon, energy expert at uSwitch.com.
First Utility, the UK’s largest independent gas and electricity supplier, last month announced it had become the first independent supplier to supply 1m customer accounts – the equivalent of 550,000 customers. The news signals a wider switching trend which has seen customers abandoning top suppliers in favour of better deals.
First Utility’s cheap gas and electricity tariffs are accountable for its phenomenal growth. It offered the cheapest gas and electricity prices out of all suppliers for 23 out of the 35 weeks of the year from January 2014.
Despite some reported First Utility customer service issues, the company has recently invested more than £10m in improving its customer service offering and has seen a ten-fold increase in its customer base in less than 3 years.
Challenger suppliers like First Utility have attracted widespread media attention in recent months after the big six suppliers lost 2m customers to their smaller rivals. Independents now have a 7.6% share of the domestic energy market – an increase from just 0.2% five years ago. Britain’s big six have seen their market share slide from 99.8% five years ago to 92.4% currently.
Households have been switching away from the big six in their droves as constant price hikes, battles for refunds and poor customer service has taken its toll. Seven in ten users of the price comparison websites Energyhelpline, GoCompare and uSwitch are now moving to smaller energy firms.
However, since big six supplier SSE launched a new, cheaper tariff, the top companies have been clawing their way back up the league table to occupy five of the ten spots in the uSwitch energy guide. Sainsbury’s Energy, which is powered by British Gas, comes in sixth and npower’s Online Price Fix November 2015 tariff comes in fourth behind cheap utility tariffs from First Utility, Extraenergy and Ovo.
‘Small suppliers have been leading the charge with the cheapest deals, so it’s great news for consumers that the big six are fighting back with better tariffs. These include ‘SSE Direct’, npower’s ‘Intelligent Control’ plan – which comes with a free intelligent Nest thermostat – and the longest term fixed plan on the market from EDF.’ says Lyon.
‘Suppliers need to prove themselves both on price and service if they want to win customers so no company – big or small – can afford to rest on its laurels. Consumers are voting with their feet and are easily attracted by cheaper prices and the promise that their bills will be protected from future price rises.
Colin Urquart is a political commentator and energy blogger. He works with various agencies to support change in the energy sector.