Yesterday, Ofgem released its annual State of The Energy Market report. There have been some positive developments over the course of the last year, including more people switching, but more than half of all consumers remain on variable energy tariffs.
Whilst these consumers are paying over the odds for their energy, the government is introducing a temporary price cap on all standard variable and default fixed-term tariffs. The price cap should be in place by the end of 2018.
The difference between the average standard variable tariff price of the six large suppliers and the cheapest market tariff was on average £320 between June 2017 and June 2018. That is more than £4bn of savings that could be made if everyone was on the cheapest fixed price tariff.
More people are switching, around 20% switching rates for both gas and electricity, but only the traditional six largest energy suppliers have market shares above 5%, and 60 energy suppliers have market shares below 1%.
Findings from the State of the Energy Market Report
- 73 – The number of active licensed suppliers in June 2018 (last year: 60)
- £320 – The approximate amount consumers on a Standard Variable Tariff could save by switching to the cheapest tariff in the market (last year: £300)
- 54% – The proportion of consumers on a default tariff, not including prepayments meter tariffs (last year: 57%)
- 19% – The proportion of consumers switching supplier between July 2017 and June 2018 (last year: 17%)
- 61% – The proportion of consumers who reported they have never switched, or have only switched once (last year: 58%)