You are here: Home - Household Bills - News -

Profits dive for energy giants as customers switch to independents

0
Written by: Paloma Kubiak
11/10/2018
The market share and profits of the six biggest energy suppliers in the UK has declined as more customers switched to small and medium providers to get a better deal.

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.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week