Even though the number of small suppliers is growing, with well-known household names such as the Co-op swelling their ranks, just 4% more energy customers would consider using one now compared to a year ago, according to the report by comparison site uSwitch.com.

Both Ofgem and the Government are looking to new entrant suppliers to help shake-up the market and to deliver a better deal for consumers.

However, while less than a quarter of consumers (22%) are content to stick with the big six because they are happy with their current supplier, fear factors are stopping many more from moving away.

The biggest concern holding consumers back from moving to a smaller supplier is the worry that it could go out of business with almost a third (31%) saying this would stop them from switching. A quarter (25%) would be frightened of losing their supply if something went wrong, while a fifth (21%) would not trust a supplier they had not heard of.

Ann Robinson, director of consumer policy at uSwitch.com, said: “Price hikes, rocketing profits and fines for mis-selling have left consumers feeling disenchanted and fed-up with Britain’s big six suppliers. But instead of small suppliers and new entrants mopping up, they have their work cut out for them because they are yet to convince consumers that they really are a safe bet. Consumers like what smaller suppliers have to offer, but fears about size and security are holding them.”

While fears about size and security may be natural, they are also unwarranted. For example, in the event that any energy supplier went out of business, Ofgem, the regulator, would ensure that customers are automatically transferred to another supplier so they do not lose their supply. This safeguard is in place regardless of the size of the energy company.

Robinson added: “Consumers cannot continue to be allowed to turn a blind eye to smaller suppliers because of unfounded fear factors – they should really be benefitting from the fact that there are now more options available to them.”

Responding to uSwtich’s report, Energy and Climate Change Minister Greg Barker said:

“More small suppliers in the energy market is great news for the consumer. It’s encouraging that the number of households considering switching to small suppliers has increased, but I agree with uSwitch that more needs to be done so consumers better understand the benefits smaller players can offer.

“The Government is taking action to benefit energy consumers and to stimulate more competition and choice in the energy market.

“We have reduced red tape for small energy firms by exempting them from a number of obligations. We are using the Energy Bill to ensure we can act should Ofgem’s proposals to open up the wholesale market not deliver. We are also reducing the bamboozling array of tariffs on offer and making it easier for consumers to compare and switch suppliers.”

 Energy ‘best buys’:

Based on a medium user customer using 3,300 kWh of electricity and 16,500 kWh of gas. Correct as at 18/4/2013.