Over 400,000 consumers switched away from the Big Six as a result of the Covid created recession

Covid-19 lockdown impacts

The data released by Energy UK and the auto-switching company Flipper, shows that the numbers switching away from the biggest energy suppliers jumped by 25% year on year in June and July.

The increased move away from the largest energy suppliers comes as millions of people have been forced to work from home and have seen then energy bills increase as a result.

Smaller, challenger energy suppliers are now offering more favourable tariffs and with the recent announcement by Ofgem that the energy price cap on variable tariffs will be cut to £1,042, its lowest ever rate it has spurred more people to switch their energy supplier.

Concerns over the state of the economy is also playing its part. With the government’s furlough scheme due to end in October, many economists are forecasting a grim time for the UK job market.

This negative outlook is spurring consumers to act and seek out better deals for their energy and other utilities.  

One Million switches

Over the June and July period over a million households were shown to switched energy supplier with the main incentive being to save money.

Challenger energy suppliers have several advantages over the larger ones. These include:

• Lower overheads lead to lower costs for their customers.
• According to Ofgem, customers of smaller energy suppliers were more confident that they were getting a good deal.
• Increasing competition is leading to more innovation in the energy sector meaning that smaller challenger energy suppliers introduce new tariffs, more variety, and cheaper costs.
• Often easier to contact and resolve any issues.

“People are now seeing the impact of the increase in home energy usage since lockdown in their bills and are taking action. With pressure on household budgets expected to increase in the coming months as the furlough scheme ends, we expect this trend to continue,” said Mark Gutteridge from Flipper.

Emma Pinchbeck, of Energy UK, a trade body, said: “Although Ofgem announced a cut to the price cap, it’s still very much worth customers checking they’re on the best deal for them – either by contacting their own supplier or checking across the rest of a very competitive market."

The increased competition in the energy market has seen the Big Six energy companies lose their market share. Since 2013 they have lost over eight million consumers to smaller challenger energy supply companies. Prior to that, they supplied the energy for 98% of all UK households.

Read more: How to start an energy company

Further Reading

Energy Bills: Helping your customers understand their energy bills

Number of consumers switching energy supplier increased again in July and Smart Meter Installations jumped 120%

Get Connected with Dyball Associates DCC Adapter

Dyball Associates are proud to help new supply businesses successfully launch in the UK market.

Between our energy market consultancy services and the software we’ve developed, we’re supporting new UK electricity and gas suppliers to get set up and start supplying.

Follow us on Twitter and LinkedIn to keep up to date with the latest news and updates in the energy industry.