A quarter of customers are now with smaller independent energy suppliers and as such, the market share of the ‘Big Six’ (British Gas, EDF, E.ON, Npower, ScottishPower and SSE) has fallen to a new low.

According to energy regulator Ofgem’s State of the Energy Market 2018 report, annual profits of the energy giants has fallen for the first time since 2014. They’ve seen a 10% fall to £900m.

While competition and switching is benefiting many customers, Ofgem said more than half of households (54%) were still on poor value default tariffs. And many vulnerable customers are likely to be overpaying for energy.

A third of those living in rented social housing were on pricey prepayment meters and one in five living in private rented housing were in fuel poverty.

But the regulator noted that last year, just 17 households had their gas or electricity disconnected, down from the 8,300 peak reported a decade ago.

It also revealed that average household energy consumption has fallen by 5.5% for gas and 3.3% for electricity, due to better insulation, milder winters and customers turning off to save money.

However, the ‘Beast from the East’ in March this year saw heating demand rise to its highest level since 2010.

‘Positive developments but not good outcomes for all’

Dermot Nolan, chief executive at Ofgem, said: “We have witnessed many positive developments in energy over the last year, but the market is still not delivering good outcomes for all, especially the vulnerable.

“Ofgem has introduced the safeguard tariff which ensures five million households, including some of the most vulnerable, pay a fairer price for their energy. Price protection will be extended to a further 11 million customers on the worst deals.”

Richard Neudegg, head of regulation at uSwitch, said: “With more households choosing small and medium suppliers over the Big Six, consumers have woken up and smelt the savings that can be made by switching energy supplier.

“We’re now close to a tipping point where the majority of customers will have moved away from poor-value standard tariffs. However, at a moment of record competition, the introduction of a widespread price cap will lull consumers into a false sense of security through a cap trap which could actually push prices up and discourage people from shopping around.”

Related: See YourMoney.com’s A guide to switching energy and Can you trust small energy suppliers? for more information.