Independent energy providers gain as 400,000 customers switched UK suppliers last month

Big Six logo montageMore than 400,000 customers switched energy supplier last month – which is a ‘staggering’ 55% increase from January.

February 2016 saw 413,762 electricity switches. For the third time in less than a year, the number of switches has exceeded 400,000.

The latest electricity switching data shows a net gain to small and mid-tier suppliers of 115,773 which is around 30% of all switches in February.

Lawrence Slade
Lawrence Slade

Lawrence Slade, Chief Executive of Energy UK, said: “Switching seems to be a buzz word at the moment – it’s fantastic seeing such positive numbers every month.

“Customers clearly want to make the most of the really good deals out there in the market. The industry continues to work towards making it easier and quicker for customers to switch, which is reflected in yet another high number of switches.”

Meanwhile, the Competition Authority has published its long-awaited “remedies” which it says will fix Britain’s broken energy market. It follows a long investigation which found the Big Six were over charging loyal customers.

Since 2014, the CMA – the UK’s primary competition and consumer authority – has been carrying out an independent, comprehensive investigation into the energy market to find out whether it’s working for billpayers.

It found that people could have been paying about £1.7 billion a year more than they should be and have recommended three main proposals:

  • An Ofgem-controlled database to allow rival suppliers to contact domestic and microbusiness customers who have been stuck on their supplier’s default tariff for three years or more to help them see if better deals are available.
  • A temporary safeguard price control for the four million households on pre-payment meters who face limited competition from suppliers and whose ability to switch and find better deals is far more limited than for credit and direct debit customers.
  • Removing the four tariff rule to enable suppliers and price comparison websites to offer tariffs designed for certain customer groups.

Amber Rudd, British Energy Minister, said: “This is a wake-up call to the Big Six.

“Energy customers should get a fair deal from a market that works for them. That’s why we called for the biggest ever investigation into the energy market and won’t hesitate to take forward its recommendations.

“This report goes hand-in-glove with everything this Government is doing to deliver a fair, competitive energy market that puts the families and businesses paying the bills first and the power back in their hands.”

Juliet Davenport, Chief Executive of independent supplier Good Energy, said: “I want to see the CMA holding the big energy companies to account.

“For far too long the Big Six have taken loyal customers for granted.  This report needs to deliver practical solutions which really do un-stick the so-called ‘sticky’ customers and help them find the best deals.

“Consumers deserve a fair and transparent market so they can have confidence in their energy suppliers. And energy companies deserve a level playing field which supports and encourages competition. This report is the opportunity to make this possible.”

Scottish Energy Minster Fergus Ewing commented: “The Scottish Government has continually called for a fairer and more transparent system which currently discriminates against the poorest in society. Consumers have been let down by successive UK Governments and reforms in this area are long overdue.

“The Scottish Government is committed to tackling fuel poverty and ensuring everyone in Scotland lives in a warm home which they can afford to heat and I am pleased the report highlights that average customers on Standard Variable Tariffs could save over £300 by switching to a cheaper deal.

“I welcome in particular the proposed price cap from 2017 to 2020 for domestic customers on prepayment meters who have fewer options in terms of switching.

“We will carefully consider this report, and the recommendations for reform in detail to ensure they address issues faced by Scottish consumers in particular vulnerable and low income groups.”

Since 2009 the Scottish has allocated over £500 million on a range of Fuel Poverty and Energy Efficiency programmes which have made hundreds of thousands of homes warmer and cheaper to heat.

Meanwhile, German energy giant E.On has more than doubled losses 2015 to £5.4 billion compared to the previous year. Its UK earnings also fell – down by 9% in 2015 to £267 million, compared to £294 million the previous year.

E.On – which is one of the Big Six energy providers in the UK – blamed ‘keen competition in the market place for customers’ and a 3.5% cut in its retail gas prices.

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