One in four UK energy customers have moved from contracts with larger firms to small and medium sized suppliers after the government moved to cut the Big Six’s monopoly of the market.
The surgency in smaller suppliers has significantly reduced the market share of the Big Six firms and slashed profits of the circle for the first time since 2014 down to £900 million, according to an Ofgem release.
There are now 73 licensed suppliers on the energy market, up from 13 in 2017, which the watchdog said means “consumers who shop around have more choice of suppliers than ever before”.
Claire Perry, the UK energy and clean growth minister, said: “This report shows fewer households are on rip-off default tariffs as more people choose to switch suppliers, saving hundreds of pounds on their bills.”
Four years ago, Ofgem launched an “action plan” designed to reduce barriers to growth for smaller firms and reduce the market share of Big Six companies that dominated the sector with close to 100% of the market in 2011.
However, despite this trend over half (54%) of vulnerable customers remain on expensive default tariffs and continue to be the “most likely to be paying over the odds for their energy”.
This comes following the announcement that the proposed merger between two of Britain’s Big Six firms, Npower and SSE, have been given the all clear by the UK’s competition watchdog to go ahead.