Is it simply a gamble that did not pay off

Verdigris

"Gambling" on the small suppliers has paid off handsomely for me and I don't even use a lot in the first place. Pay by DD, put in a meter reading every month and keep your eye on the market is all you needed to do. Sadly, it looks like I'm going to have to find a new hobby. It was fun whilst it lasted.

JohnB47

Verdigris said:

"Gambling" on the small suppliers has paid off handsomely for me and I don't even use a lot in the first place. Pay by DD, put in a meter reading every month and keep your eye on the market is all you needed to do. Sadly, it looks like I'm going to have to find a new hobby. It was fun whilst it lasted.

Same for me.

Streaky_Bacon

savers_united said:

This may be hard to take for many who's supplier have folded and now face some serious price hikes, but is the reality that those who chose a fairly new less known supplier with often poor reviews and feedback understood there would be an increased risk they could run into financial problems and fold, that signing up to a tariff with far lower prices compared to the big six came at a risk. Yes there is an ofgem process in place to protect supply and find another supplier but when you enter into a fixed deal well below the other offerings you are gambling on the suppler staying in business for the long term. 
Its not like suppliers have not gone out of business before, it can and does happen.

Plenty of financial decisions could be classified as gambling, but I don't see that taking the cheapest tariff is gambling, given that a customer's money is protected, and the worst that is going to happen is that they will be put on a price capped variable tariff.

savers_united said:

Those who are naturally a bit more cautious about these things opt for a big name and pay that bit more to get security of supply and customer service (although not always the case), better IT systems, apps etc.

I don't personally feel that these things are usually worth making extra to a big name. There is no actual supply issue when a supplier goes out of business, just the faff of dealing with the SoLR, and the worst customer service I have had by far, was from a big name (Scottish Power).

But this is what people are paying for. They are not being cautious vs gambling. The big names charge more because people feel they are getting more, whether that difference is real or not. Like paying for a £20 bottle of wine, rather than a £5. Some people feel they are getting a better product, and are happy to pay more, but the £5 drinkers aren't gambling and the £20 drinkers aren't being cautious.

savers_united said:

I am not knocking anyone's decision here as quite often these things pay off and you save big, but from time to time they don't, and as much as I feel for those who are affected is it fair to those who took the more cautious approach and often paid more with a better known supplier should be asked to start paying more to cover this fallout from these insolvent businesses, if the cap is raised or scrapped or a levy applied it is going to effect millions who did not risk going with little known suppliers.

I don't see that the current situation with small suppliers is leading to the customers of big name suppliers have to pay more.

The big names are raising their prices because the wholesale cost has gone up, and the price cap is increasing for the same reason, not because smaller suppliers are failing.

Likewise, if the cap is raised again or scrapped, it will be because of spiraling wholesale costs.

The small suppliers are all being allowed to go to the wall. If any suppliers are bailed out it will be the big names, the "too big to fails".

The big names also have deep pockets and that can be an opportunity in times of crisis.

https://www.telegraph.co.uk/business/2021/09/23/winners-making-fortune-energy-crisis/

"Beyond the immediate profits to be made from price spikes, larger players in the energy sector are likely to end up consolidating their position as others collapse around them. British Gas, owned by Centrica, has been losing customers for years, but this week picked up 350,000 customers from failed supplier People's Energy.

They are arguably a burden at current wholesale prices, but will turn into an asset once prices fall.

Analysts at the consultancy Baringa estimated the UK's remaining 50 retail suppliers could fall to 10 by the end of the crisis, with stronger suppliers such as Octopus, British Gas, Scottish Power and Ovo set to grow as a result."

Were BG forced to become SoLR for People's Energy, or have they been playing the game long enough to know good long term opportunity?

Are they using the cash that they have amassed from loyal customers over the years, to keep prices down, or using it to snap up new customers at an initial loss?

NINJA59

I disagree with the OP if being entirely honest and maybe the OP perceives some of these as small suppliers, the reality is somewhat different Bulb has 1.7 million customers and is apprently the UK's 6th or 7th largest and is teetering on the brink should media reports be believed. 

The fact is simple, some of these suppliers already gone were small, some were mid - large level and some are like Bulb (not really a small supplier) teetering on the brink, this has nothing really to do with customers gambling on small suppliers, but failure of government to ensure realisitic storage and sufficient energy protection should the world change, something media reports are forgetting as well is a national grid facility is offline following a fire and will be until mid October.

That being said in one area the bust suppliers are to blame as they want to aggressively take market share and take that risk of loss making on customers, possibly to take market share, that is not a customer decision though. The customer choosing it is likely to not take the cheapest but a mid level price if being savvy, possibly look on companies house, social media and review sites, I would still do that regarding reviews and social media even with a big 6 because of the below...

Be real and look around, in terms of reviews some of the smaller suppliers had far better ratings and far better technology! The last time I got solr to BG it was like stepping back to the stone age in terms of tech, the login area only really worked on Internet Explorer/Edge (due to the platform it was developed in and was far far to heavy in source code), I mean !!!!!! come on and the app was near useless (as the thread on this forum would say)! Some small to mid suppliers sites might not have all the bells and whistles, but do they work efficiently, quickly and minimal of fuss? Yes and is something I always look at (I work in the digital marketing space for reference).

Large enterprises sometimes because of their ocean liner cannot respond quickly to things, one being taking technological developments due to legacy systems, but energy providers seem the absolute dogs dinner out of the ones I have tried in the big 6. We only have to look at the rise of disruptors in other verticals to get that.

Equally another thing I look for is quick, effective billing - having being solr and used one of the big 6, then I have found their billing haphazard, slow and usually wrong in all cases. Avro did pee me off with the estimates being formed based on a few extra days mind after the actual reading.

Additionally, I see some posts assuming (and possibly true) about making ends meet, but from what I am seeing now on another forum these are not falling into that status at all, but more just people not choosing the cheapest, but a mid level option. Similar to like insurance, shopping around for a better deal.

The reality is that market is changing as well though, to ensure a wider selection get a better deal as so many don't change, there following the recent FCA investigation, the insurers are simply increasing costs for new customers, not making current customers cheaper. In fact I know one insurers response was to half discount rates for new customers and instead move it to a multi product status to take more from different areas of insurance need. So all those people shopping around might be in for a shock...

Ultimately, as a customer of one of these failed suppliers then the big 6 picture is not worth the cost involved in terms of perceived better service or tech, if anything it is more hassle. The only thing that protects the larger energy suppliers is 4 fold really:

1. Usually owned by a multi national
2. Diversified customer offerings - not just energy 
3. Larger reserves to weather a storm (because of point 1 and 2 above)
4. If it all goes a pete tong then hey we are too big to fail, government bailout please...although history shows the odd one where a government went no, in most cases it is a yes. Additionally, there is some reports that Bulb is of that status as no solr could take on 1.7 million customer supplies, so much for too big to fail just applying to the big 6.

One final point regarding the cap, which I get where the suppliers in question are coming from in the current wholesale market issue, they are to blame in the big 6. Ultimately for years they were price gouging raising rates as soon as one did you knew the rest would do the same on the variable tarriffs (with people not shopping for fixed deals). So whilst I have some sympathy, if you look back why the cap was introduced then you might need to accept the blame for it being introduced despite your current situation. 

johnbhoy70

For me, over the years it's become time versus reward. Not the perfect money saving strategy but annually if there wasn't a  relatively decent saving ( that'll differ for everyone) I wouldn't bother. When I changed 3 or 4 times over the fee years with Avro I could have probably have got cheaper elsewhere but didn't want the hassle with the horror stories of some CS of smaller companies and companies going bust becoming  more common. Back in the heyday of big cashback you were probably better with a big player when you factored that in anyway. I always took that chance and never once didn't get it