Small Business Advice

Who are the Big Six and why are so many customers leaving them?

Jack Oneill

Hundreds of thousands of customers abandoned Britain's Big Six energy companies earlier this summer.

Thousands of customers abandoned Britain’s Big Six energy companies earlier this summer in a bid to save money.

According to trade body Energy UK, 481,677 customers’ switched supplier, with almost half of those opting to leave a member of the Big Six.

Who are the companies?

The Big Six energy companies are the UK’s biggest and oldest private energy suppliers. They have their roots way back in 1989 during the privatisation of the country’s electricity supply.

In the ‘90s this led to creation of six major companies, all of which also began to supply gas. We now refer to these businesses as the ‘Big Six’, and despite strong competition from smaller suppliers over the last ten years, still provide energy to over 90% of UK homes.

  1. British Gas: the largest supplier in the UK, servicing more than 11 million homes with gas and 6 million with electricity.
  2. EDF Energy: the largest electricity producer in the UK and provides gas and electricity to 6 million homes.
  3. E.ON: previously known as Powergen, E.ON provides energy to around 7 million homes.
  4. npower: provides energy to around 5 million homes.
  5. Scottish Power: Also has around 5 million residential customers.
  6. SSE: The second-largest energy supplier with almost 9 million customers. It’s also a major hydro and wind energy producer.

Are the Big Six more expensive?

Close to half a million households switched energy supplier in July, showing a 23% increase compared to the same month in 2017. This jump brings the overall number of energy switches so far this year to 3.2 million and suggests that more Brits are likely to change supplier than ever before.

Recent months have also seen the Big Six punishing customers with a series of price hikes. During July, a trade body found that 47% of all switchers left a big supplier in favour of a smaller alternative.

With their average tariff sitting at £1,145, the Big Six tend to rank among the most expensive providers, with smaller providers offering cheaper bills and often access to cleaner, more environmentally friendly energy too.

Commenting on the figures, Steven Day, co-founder of renewable energy supplier Pure Planet, says: "These figures show just how much ground the biggest are losing to smaller, more efficient suppliers.

"The Big Six business model is broken, their operating costs are too high and consumers are being asked to pay inflated prices for that reason. We now have a market where smaller, cleaner independent suppliers can beat the Big Six hands down on price and customer service.”

The Big Six energy companies have all ranked in the bottom 10 of an annual Which customer satisfaction survey as consumers turn to medium and small suppliers.

The survey found only a third (32 per cent) of customers with the Big Six are very satisfied on average, compared with 52 per cent for medium-sized suppliers and 45 per cent for smaller suppliers.

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Could the Big Six become the Big Five?

Since Iberdrola’s acquisition of Scottish Power at the end of 2006, the Big Six have been fairly stable. That was until SSE, npower and E.ON became entangled in a variety of acquisition cases, causing Ofgem to step in to ensure that competition in the UK energy market wouldn’t be harmed.

In the last week, the competition watchdog has given the all-clear to a merger of two of the Big Six – SSE and npower. The Competition and Markets Authority (CMA) said consumers would still have “plenty of choice” on standard variable tariffs after Npower and SSE’s proposed tie-up.

Whatever happens, it looks like the Big Six will be shaken up one way or another. There’s certain to more developments as we head into 2019.