Small energy suppliers

Smaller energy providers offer deals that compete, and in some cases, are better than those from well-known energy firms. Whether you’re looking to do an electricity comparison, get a quote for gas, or both, independent energy suppliers could save you a tidy packet.

That said, many people are wary of them, with about 70% of UK households sticking with the traditional Big Six energy providers. There’s often a feeling that you might risk your supply being cut off if you're with a smaller supplier, or a perception that the other services such as billing, customer services. etc. may not be as slick.

But that’s a mistake and you could be missing out on significant savings for thinking that way.

Why should I consider a small energy supplier?

Firstly, smaller and independent suppliers can offer you some great tariffs. In an attempt to make the energy market more competitive, the government has allowed smaller providers some slight advantages over the bigger companies. Small energy companies are, for example, exempt from the Energy Company Obligation (ECO) scheme.

This support from the government allows the smaller suppliers to make savings which, in turn, are passed on to the customer. This means that independent energy firms can actually offer some of the best deals on the market. So, if you’re doing an energy comparison don’t forget to look outside of the Big Six.

What does the ‘Big Six’ mean?

When we talk about the Big Six, we mean the six biggest energy companies in the UK – British Gas, EDF Energy, nPower, E.ON, Scottish Power and SSE. These are the household names, the big dogs, the companies who’ve been around the block a bit. You’re probably with one of them now or have been with one of them at some point.

But if you’re doing an energy comparison for the UK, don’t forget to include the little guys because they could offer you some surprisingly good deals.

So, what can smaller suppliers offer?

Most importantly, they can deliver cheaper deals, but they also – perhaps surprisingly – offer some of the best customer service in the sector. Compared to some of the bigger companies, many of the small providers have impressive customer service ratings. For example Green, came first overall in the Citizen's Advice customer service ratings in 2020, well above E.ON Energy who were 32nd.

It makes sense that, in a smaller company, each customer ‘matters more’ whereas, with a big company, it’s easy to get lost in systems and the shuffle. And, let’s face it, we all want to matter more.  So, it’s worthwhile looking at the customer service record of a potential new provider to see how they treat their customers. On the flip side, smaller companies have less of a track record, so are sometimes deemed as less trustworthy in the eyes of some.

One other thing to consider when you compare energy suppliers is, where the energy comes from. If you place a lot of importance on green energy, you should check the fuel mix for each supplier to find out what percentage of the energy comes from renewable sources. Who doesn’t want to save the planet and save money? Taking the time to do a good energy comparison could save you money and ensure you’re getting exactly what you want from an energy supplier.

What happens if a small supplier goes bust?

People are often wary of going with a smaller energy supplier because they are worried about what might happen if the company goes out of business. Many people think their energy may be cut off if this happens. It won’t. Really. In fact, if a supplier does go under, you’re well protected.

If a small provider goes bust, Ofgem has your back. Ofgem will move you to a new provider called a Supplier of Last Resort (SoLR) and you don’t need to do anything. There'll be no gap or pause in your energy supply.

Once Ofgem has moved you, you can choose to remain with the SoLR, change tariff with that supplier or change supplier altogether. The official advice is to take a meter reading then do nothing until Ofgem has been in touch with news on your new supplier.

Ofgem will usually make a speedy decision and announce details on their website. During the process they ask suppliers to bid on taking on the old suppliers customers to ensure you get a fair deal, but, you may still want to consider moving again. Once they’ve found the new supplier, you’ll be moved into a new contract with them and then the new provider will contact you.

Be aware that the contract the supplier puts you on will be a ‘deemed’ contract and these are not usually particularly cheap contracts. So, once you’ve been moved, you may want to compare energy suppliers and switch – and we’ll be here ready and waiting to help you do it.