In the UK, the energy landscape is dominated by six major energy suppliers, British Gas, EDF, E.On, Npower, Scottish Power and SSE.
It is estimated that the Big Six supply 92.4% of the British population at the moment with their electricity and gas – the thing is that these 6 companies not only tend to be rated the worst when it comes to customer service, they also tend to be the most expensive!
Why are the big six energy companies more expensive?
There are a few reasons why the bigger energy companies are more expensive, firstly their overheads are far higher than most of the other smaller upstarts – this additional cost is sadly passed on the consumer.
In addition, any energy company with over 250,000 customers is obliged to pay the Green Levy, funding households for free insulation / boilers and other energy efficiency products. You may remember at the end of last year that the Energy companies tried to fight this obligation and the Government backed down and reduced their required financial input.
People’s perception of the Big Six is changing!
We go into 1000s of people’s homes every month and over the last couple of years we have genuinely noticed a change in people’s perception of the bigger energy companies.
It may simply be the bad press that they get (we are not sure the last time we read a complimentary piece from the media about them), but smaller energy companies consistently come top of the energy price leagues. The smaller companies pass on the savings resulting from wholesale prices going down, while the bigger energy companies feel in a position that they don’t need to. This is despite the fact that these smaller companies need to buy their supplies from the big six!
Over the last 5 years the smaller energy suppliers have increased their market share from 0.2% to 7.6% – with 3.8m customers now getting their gas from the smaller companies. This should be a real cause for concern for the big six – these numbers should force them to bring their prices down to match and potentially even beat the smaller competition.
For you though the changes can only be good – with more competition in the market, prices will be more competitive for both gas and electricity, although the overall trend for gas and electricity will still be tied to global fuel prices in the long term. Also, the sheer number of people now using the smaller companies should give you the confidence to trust in them too – it is worth mentioning again that electricity is the same whoever provides it, so apart from price and customer service nothing should tie you to a particular supplier.
What should you do to change energy supplier?
Click ‘compare now’ on the banner below – this will take you to uSwitch.
Once there you can quickly get a view of how much you could save on your energy bills by swapping supplier.
We are not trying to cause a mass exodus from the ‘Big Six’, what we want to do is get them to compete – at the moment they charge whatever they want because they can. As people realise they can swap energy supplier with a minimum of fuss (the comparison websites do everything for you), the 92.4% will hopefully fall much further, so then the energy suppliers really are sparring on equal footing.
Think we missed something? Do you have a different opinion?
Comment below to get your voice heard…
Definitely worth checking your energy usage and seeing if there is a cheaper tariff on one of the comparison sites. All you need to do, is get your yearly energy usage for gas and electricity (in kWh) and then put them in with the name of the tariff and it will display which tariffs are cheaper.
Once you have done that and found the one you want you simply put in your direct debit details and you are away, the comparison site do everything for you behind the scenes. Can’t recommend doing this highly enough!
It is amazing how much you can save. This weekend my Grandad told me his British Gas deal was coming to an end and he was going to go with them again. When I took a look at his bills it was clear that he was on a deal that was completely wrong for him. He uses a lot of gas to heat his home, but the gas per unit rate was very high, at 4.6p/kWh, whilst the electric rate was a much more competitive rate. We took a look at uSwitch and got him onto one of EON’s tariffs with a low 3.6p/kWh gas unit rate. That will save him £320 a year.
Older people and those unable to work out online things really do lose out, so dont take it for granted that your friends and family have got the best tariff. Uswitch is really easy to use, so take them on it and show them how much they can save.