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Should I switch to a smaller energy supplier?
Energy customers are losing out on millions of pounds by not switching to smaller energy suppliers. So what's stopping us?
by Victoria Bischoff on Apr 25, 2012 at 00:01Follow @VBischoff
Energy customers are losing out on millions of pounds because they are not switching to smaller energy suppliers, according to new research.
In fact, a survey of over 2,000 people revealed that just 52% of customers would switch away from the Big Six – British Gas, EDF Energy, E.ON, Npower Scottish Power and Scottish and Southern Energy.
Yet, only 19% say this is because they are happy with their current provider.
Why aren’t people switching to smaller firms?
Concerns about size and security appear to be what’s holding most people back.
Some 35% of customers worry a smaller supplier will go out of business, while 28% are concerned they will lose their supply if something does go wrong – fears which are completely unfounded as there are safeguards in place, said uSwitch.
A number of people are also reluctant to switch to a smaller supplier because they don’t think they will get a better deal – even though a number of small suppliers offer some of the lowest prices in the market.
First Utility, for example, currently tops uSwitch’s energy best buy table with its iSave Dual Fuel V10 tariff costing £1,027 a year – £322 cheaper than the most expensive standard plan on offer.
Customers frightened their gas and electricity might cut off if their energy company goes bust should be aware that there is regulatory protection in place to prevent this from ever happening.
Under the Utilities Act 2000 Ofgem has the power to appoint what’s known as a ‘supplier of last resort’ in the event an energy company is forced to wind up.
All this means is that the regulator will ask one of the big suppliers to take on the failed company’s customer base. The switch will happen automatically and you will then be given the opportunity to move to another supplier if you wish.
And even if no supplier volunteers to take over the customers, Ofgem has the power to force one to – regardless of the size of the business.
‘If anything happened to your supplier, Ofgem would step in so you would always be guaranteed supply,’ reassured Ann Robinson, director of consumer policy at uSwitch.com.
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