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Should I switch to a small energy supplier?

We explain the pros and cons of choosing smaller gas and electricity companies.
Sarah Ingrams
Marianne Calnan
Big vs small energy companies 485624

Are you with one of the biggest energy companies? More than half of us buy gas and electricity from the 'original' big firms - British Gas, EDF Energy, Eon and Scottish Power - despite the choice of around 30 suppliers available in the energy market.

You could be forgiven for thinking this is because they offer something special to their loyal customers, but this isn’t the case. Each year, we ask energy customers to tell us what they really think of their suppliers - and these firms never seem to top the table.

And it's not just longstanding firms which are the biggest in the market; some newer suppliers are now just as large as the companies they were set up to rival. Ovo Energy for example, has five million customers across its brands since it took over rival SSE in 2020 and supplies energy to Boost and SSE customers, while 2022 WRP Octopus Energy supplies 2.4million homes and tends to be better loved by its customers.

Read on to see what newer and smaller suppliers can offer, the benefits and risks, and what customers think of them. 

Big vs small gas and electricity companies

The biggest energy suppliers in the market are British Gas, Eon, EDF, OVO (which owns the SSE brand) and Scottish Power. Between them, these firms make up just shy of 70% of the supply market share for both electricity and gas. 

Data published by Ofgem in the second quarter of 2021 show the next biggest companies are Octopus (7.7%) and Bulb (4.9%), followed by Shell Energy (3.6%), Utilita (2.7%) and Utility Warehouse (2%). Newer challenger firms include Outfox the Market and So Energy, but not all small brands are new. Ecotricity, GEUK and Good Energy, for instance, have all been selling gas and electricity for more than a decade. 

In fact, small suppliers make up 8.2% of the market.

It's worth bearing in mind that while these market proportions are the latest figures from Ofgem, the market has since seen a stream of firms stop trading, so these figures will have changed. For instance, Octopus Energy has since gained 580,000 Avro Energy customers after it closed in September 2021.

To find out if you should pick a smaller supplier, a newer supplier, or stay safe with an established firm, we analysed our survey data. 

Energy company employee smiling while on the phone

Which energy customers are happiest?

Our online survey, based on 8,803 energy customers in Great Britain in October 2021, revealed a wealth of difference between firms when it comes to how satisfied their customers are. 

While the top-ranked supplier got an impressive customer score of 70%, the company at the bottom of the table got a customer score of 51%.

The top-ranked firm, Octopus, is a large supplier, serving around 2.4million households. The lowest-ranked supplies a similar number - more than two million homes.

Proportion of satisfied customers 

Customers of the traditional big firms generally tend to be less satisfied overall than energy customers on average, according to our survey. No more than 65% of customers from the traditional big companies told us they were satisfied, whereas the average figure among all customers we heard from was 67%. On the other hand, 81% of So Energy customers told us they were satisfied with their provider.

Our survey also revealed big differences between the proportion of customers who rated each aspect of their energy company’s service as good or excellent, as the table below reveals. 

Customer ratings and energy supplier sizes compared

MeasureTop resultCompany sizeBottom resultCompany size
Good billing accuracy78%Large55%Large
Good statement clarity81%Large54%Large
Good customer service72%Small48%Small 
Good complaints resolution45%Small0%Small
Good value for money81%Small36%Large

Based on an online survey in October 2021 of 8,803 people. Large suppliers have more than 5% market share, medium have 1-5% market share and small have less than 1% market share, according to Ofgem in January 2021.

Big firms Boost, Ovo Energy and SSE collectively got the highest proportion of complaints per 10,000 customers in the second quarter of 2021, at 3,246. Boost is part of the Ovo Energy family, as is SSE after being bought out by the firm in 2020. 

Boost also had among the highest proportion of people satisfied with the resolution they had for their complaint, at 41%, as well as a score of 16 in our procedures assessment, which was the same mark as SSE. Ovo Energy, meanwhile, scored 12 when it came to our procedures assessment, while the average mark among the 17 firms was 13.6.

Smaller provider Outfox the Market, meanwhile, had one of the lowest numbers of complaints per 10,000 customers in the same period, at just 70. The number of its customers who were satisfied with the resolution they had for their complaint was one of the lowest, at 11% and it got a score of 11 in our procedures assessment.

Our procedures assessment involves looking into whether you can get commonly asked questions answered, whether customers can contact the energy supplier when it's convenient to them and in a way that suits them and whether the company charges exit fees.

Our survey results have found small firms whose customers consider them excellent, as well as other small suppliers rated terribly by their customers. You can use our ratings for the best and worst energy suppliers to check any firm you're considering in further detail.

Large and small light bulbs side by side

Is it risky to switch to a small energy provider?

The ultimate risk of choosing a small energy supplier is that it goes bust. This has happened to several smaller firms in the past year, including Daligas, Pure Planet and Utility Point.

But going out of business isn’t something that can exclusively happen to small suppliers. Bulb, which had 1.7million customers, went into special administration in November 2021. Special administration measures are used when the energy regulator Ofgem can't use the more common Supplier of Last Resort Process, including because the supplier in financial difficulty is too big.

In addition, small firms can get bought out or taken over by larger ones. For example, Utility Point’s 220,000 customers were moved over to EDF in September 2021.

It's important to note that if your supplier does go under, your gas and electricity won’t be cut off. Energy regulator Ofgem appoints a replacement gas or electricity supplier to take on the failed supplier’s customers. There’s a competitive process to decide which supplier this will be. It usually takes a few days to choose the new supplier and several weeks for customers to be set-up with the new firm.

But some energy companies are placed into a special administration regime when they go bust to ensure minimum disruption to financial markets as a result of their failure. Bulb is currently operating under the measures due to its vast size compared to the other failing energy companies.

Advisory and public relations company Teneo is running Bulb for the short term, until it is either rescued, sold or customers are transferred to other suppliers. 

The new supplier doesn’t have to honour the price you're currently paying, but your credit balance is protected (even if you switched away). 

For example, Octopus Energy took on Avro Energy’s 580,000 customers in September 2021. Avro Energy offered tariffs for customers who want to manage their energy account online and pay by direct debit or through a prepayment meter. The new tariff customers could be placed onto once they have moved over to Octopus may not be identical to the one they had previously.

If your supplier has closed and you were in credit to the company, it can take several weeks (sometimes longer) to get your money back. This is because the new supplier has to go through the old supplier's records and deduct any unbilled charges. But any credit customers had with the supplier or were owed by is protected.

Sometimes the new supplier will even keep the name of the failed firm – for example Spark Energy's brand was retained when Ovo Energy took it on.

The other risk of going with a very new energy firm is that its service is largely untested. Our most recent energy companies satisfaction survey includes ratings for 17 energy suppliers, including some small ones. But some companies are too small for us to provide ratings for as we don’t receive enough responses from their customers to do so. We therefore can't vouch for their service.

If you get the Warm Home Discount (a £140 payment to those who qualify for certain benefits), check that the small supplier you’re considering will pay you this. Energy firms only have to pay out if they have 150,000 customers or more – but some smaller firms choose to pay even if they have fewer customers. 

Use our guide to check which energy suppliers will pay. Go to Warm Home Discount.

Energy company call centre with smiling staff

Should I switch energy supplier to a small firm?

Switching to a cheaper deal is not currently an option, as companies have withdrawn lower-priced tariffs or stopped taking new customers entirely.

If you’re on a cheap fixed deal, now is not the time to switch energy supplier. You’re very unlikely to find any deals at the same rates you’re paying now. Those rates (your daily standing charge and unit price) will be fixed until the end of your contract. 

But if you’re on a variable deal and have been told the price is increasing, then it’s worth comparing gas and electricity prices using Which? Switch to check how your rates compare. At the moment, price-capped variable deals are some of the cheapest options so being automatically moved by your supplier onto its out-of-contract rate when your fixed deal ends may be cheaper. 

If your supplier stops trading, there’s no need to panic as you’ll be moved to another supplier.

Follow these steps to help with your move to a new supplier:

  • Take a meter reading as soon as possible - You'll need to have this ready to provide to the new energy supplier, take a photo if possible. 
  • Ofgem will appoint you a new supplier - As the energy regulator, Ofgem is responsible for finding customers new providers if their supplier goes bust. Your supply will be protected and you'll be switched within a few days.
  • Don't switch until you're with your new supplier - Switching before you're with a new provider may make it more complicated if you're in debt or credit. Waiting until you're with your new provider will make switching smoother.
  • Wait for the new supplier to get in touch - Once Ofgem has chosen a new provider, it will be in contact with you to explain your new tariff and how to manage your balance if you're in debt or credit. You can ask to be put on a cheaper tariff at this point and can look to switch providers.

The top spots in our energy customer satisfaction survey are filled with smaller and medium-sized suppliers year-on-year, while the traditional firms tend to sit near the bottom. But as new smaller suppliers have grown, we've seen some retain their high rankings. Octopus Energy, for example, is now a large firm and took first place overall.

Ovo Energy has always been among the higher-ranking companies and now it’s also one of the very biggest. Its customers with the SSE brand weren't as satisfied as longer-standing Ovo customers, but we'll be keeping an eye out in future to see whether customers' opinions change.

So picking a supplier based on size is no way to determine quality.

Use our energy survey results to make sure you pick one of the best, and avoid the ones that aren't recommended by their customers.

Will my energy bill go up because of higher wholesale gas prices?

If you’re on a variable deal, your price can change whenever your supplier increases (or cuts) its prices. You’ll get 30 days’ warning of this change. 

In October 2021, the price caps on out-of-contract energy deals rose, adding £139 on average to annual bills – more if you have a prepayment meter or use lots of energy. 

If you’re on a fixed deal, your rates can’t change until it ends. But when it does you might struggle to find a deal as cheap as the one you’re on. The price cap will likely increase again in April 2022, by around 50% according to some analysts. As the average annual household energy bill is currently £1,138, according to energy regulator Ofgem, that would climb to £1,718 a year.

There is help available if you’re worried you’ll struggle to pay higher energy bills

Start by contacting your energy supplier. It might feel like the last thing you want to do, but the company won’t cut off your supply if you work with it to agree how much you can pay. 

Energy suppliers must agree a payment plan with you that you can afford. Options can include: 

  • Reviewing your payments or debt repayments 
  • Reducing your payments or taking a payment break 
  • Allowing more time to pay 
  • Access to hardship funds.

Also ask whether you can be added to its Priority Services Register. This gives free help and support if you’re in a vulnerable situation.

Use our independent energy site Which? Switch to compare gas and electricity prices.