Around 965,000 households switched to a new energy supplier in the months of June and July, according to new data from trade association EnergyUK. The majority of the moves occurred in July, when 519,700 switched - representing a 17 per cent increase compared to June.
However, the data also shows that 40 per cent of these switches were away from Big Six suppliers to smaller energy companies.
Why are people switching away from the Big Six?
According to wider reports, this increase in people switching to smaller suppliers follows a continuing trend that’s seen a reduction in the Big Six’s energy market dominance. As recently as 2013, these six suppliers – British Gas, EDF, E.ON, Npower, ScottishPower and SSE – had a 98 per cent market share, but as of the end of Q4 2019, this was down to around 70 per cent - a loss of nearly five million customers.
Some of the main reasons for June and July’s switches are down to the effects of the COVID-19 pandemic and lockdown. Many households have had to tighten their purse strings in the face of financial uncertainty, and have been looking for ways to budget and save. Equally, as more of us have been working from home in recent months, our domestic energy consumption has notably increased.
However, while the pandemic has exacerbated these particular customer reasons for switching, they do reflect some of the historical key factors that have led to the weakening of the Big Six’s market position.
In addition, green energy suppliers have risen in popularity, and there has been a significant shift in preference towards tariffs that use renewables. This, in particular, is an area where smaller suppliers often have better options available compared to the Big Six.
Finding the best energy deal has become a priority for many households – particularly those still on default tariffs from Big Six suppliers. So it’s not surprising that so many have switched to new providers, as it’s likely they’ve found more favourable tariffs elsewhere after comparing the energy markets.
What to consider before switching
If you’ve yet to switch – whether you’re on a Big Six tariff or not – there are a few considerations you can make that'll also make your search for a new tariff much easier.
- You can read recent reviews like ours to see who the best energy suppliers are right now. This can help you get a better understanding of the different options available to you, and which tariff types are on offer.
- You can look at the latest industry news to see what other suppliers have been doing for their customers and learn more about their current market position. Octopus Energy for instance recently unveiled ambitious growth plans that could see it become one of the largest suppliers in the UK by 2025.
- You should also review your existing tariff, especially if you’ve been on it for a while, as this will help you determine just how much you could save by switching.
When you’ve factored in the above, you can then use an energy comparison service to find the best energy deals in your area. Not only could you save hundreds of pounds on your energy bills, you’ll also join the increasing number of UK households that have switched to a tariff that better suits their needs and circumstances.
