Competition drives down collective profits of Big Six
THE collective profits of the UK’s six largest energy suppliers have fallen for the first time in four years due to rising competition, according to a marketwide report from the energy regulator.
Ofgem’s analysis has found overall profits for the Big Six dropped by 10pc to £900m last year as they lost their grip on the market to a new generation of energy start-ups.
They face further pain this winter as the Government’s controversial cap on standard energy prices descends on about 11m accounts, despite signs competition in the market is improving.
More than 73 energy companies are competing to supply gas and power to Britain’s homes, of which a quarter have opted for a new entrant.
Gillian Guy, the head of Citizens Advice, said the rising number of people opting for new energy suppliers “underlines why it’s so important that Ofgem tightens up its licensing rules”.
“We know some suppliers entering the market aren’t prepared to provide adequate customer service, or aren’t financially robust enough,” she said.