Small suppliers drive switching savings to a three year high

The average annual saving made by customers switching energy tariffs has risen to £228 – the highest since 2011, according to figures from Uswitch.com, the independent price comparison and switching service.

The increase in the average saving has largely been fuelled by the introduction of highly competitive deals from new, smaller providers who have taken market share from the big six energy providers. Figures from Energy UK reveal that 1.3 million customers moved from a large supplier to a small one in the last twelve months, equivalent to 41% of all switches.

Uswitch.com data reveals that the average customer saving is now £228, up from just £138 in May 2012 and £170 in May 2011. The figures also show that some customers, particularly those who have not switched for some time, are now saving in excess of £400 a year.

More recently, competition in the market has been hotting up following a number of competitive tariff launches by the big six, responding to cut-price deals from smaller suppliers. There are now a total of nine deals under £1,000 – which is more than at any time since 2012.

Small suppliers are also setting a high bar when it comes to customer service, with the two biggest new providers – Ovo Energy and First Utility – coming in first and second place overall in Uswitch.com’s ninth annual Customer Satisfaction Report.

Ann Robinson, Director of Consumer Policy for Uswitch.com, says: “Competitive tariffs from small energy providers have fuelled an increase in the money people can save through switching.

“This is strong evidence that competition is beginning to work in the energy market. Frustratingly, only a minority of people are taking advantage of lower prices and so vast numbers are paying unnecessarily through the nose for their energy.

“We are urging the Competition and Markets Authority to look at ways to better engage consumers in their ongoing market investigation, as this is key to making competition work.”