Big Six energy firms’ market share hits a record low as customers hunt for better deals

The Big Six energy suppliers have been forced to loosen their grip on the sector as their combined market share fell to a record low, according to fresh data from the regulator.

Ofgem said one in five energy consumers are now registered with a small or medium supplier, sending the market share of the Big Six firms down to 79 per cent for electricity and 78 per cent for gas in December 2017, from 84 per cent for both at the end of 2016.

Last year, 5.1m electricity customers and 4.1m gas customers switched supplier, the highest number in nearly a decade, and more than a third switched away from one of the six large suppliers – which include Centrica’s British Gas, SSE, E.On, EDF Energy, ScottishPower and Npower.

The shift away from the largest energy suppliers has been a quick one: just five years ago, challenger firms had a market share of 4.7 per cent for electricity and five per cent for gas.

Lawrence Slade, the chief executive of Energy UK, said the news was “further evidence of a highly competitive retail energy market”.

The government on Monday introduced legislation to place a cap on energy prices of default tariffs to fix the “broken” market, but Kevin Pratt, a consumer affairs expert at Moneysupermarket, said Ofgem’s new data “makes a mockery of the constant claims by the government and some industry commentators that the energy market is broken”.

“Quite simply there has never been a better time to be a domestic energy customer in the UK, with over 65 suppliers and all types of different tariffs to choose from,” he said.

The government’s price cap plan has been criticised by some consumer groups over its potential to backfire by allowing consumers to become complacent and thus less engaged with the market.

“Any widespread price cap must not hamper this increasing and welcome level of competition,” said uSwitch’s energy expert Claire Osborne.

According to Ofgem, more than half of consumers (57 per cent) are still on poor value default tariffs, which can be as much as £300 more expensive than cheaper deals.

“There are still too many consumers who are paying too much for their energy, which is why we are introducing price protection whilst we reform the market, to make competition work for all consumers,” said Dermot Nolan, the chief executive of Ofgem, which will be in charge of setting the cap.

Read more: “We regret this deeply”: Profits plunge at British Gas owner Centrica