Britain’s biggest energy firm has suffered a mass exodus of customers in protest at rising prices.
Since June, more than 820,000 households have switched from Centrica, the owner of British Gas, after it put up electricity tariffs by 12.5 per cent.
The power giant yesterday issued a profit warning, and its shares fell by more than 15 per cent in early trading, wiping about £1.4billion off its stock market value.
The price rises from British Gas added £76 a year to the average annual dual fuel bill for millions of people on its standard variable tariff (SVT).
At the time, ministers and consumer groups advised customers to switch to cheaper rivals where they could save more than £300 a year, and it appears many customers followed the advice.
The big switch: Since June, more than 820,000 households have switched from Centrica, the owner of British Gas, after it put up electricity tariffs by 12.5 per cent
Meanwhile British Gas, along with other energy firms, faces a further threat to profits from the Government’s plans to impose a price cap on the SVT, which is the most expensive and profitable tariff.
Centrica said only 150,000 of the 823,000 households who closed their accounts did so because of the price rise, which came into effect in September.
It said 650,000 accounts were lost as a result of so-called collective switching, where large groups of households join forces with a new provider to get a cheaper deal.
Following the customer exodus, British Gas has 13.1 million customer accounts from 7.9 million households.
Mark Todd, co-founder of the price comparison website, Energyhelpline, described the customer exodus as ‘terrible news’ for the company. He said: ‘This is a historic loss for the UK’s biggest energy supplier and shows that the shocking 12.5 per cent electricity price hike in the summer has not gone unnoticed.
Power giant Centrica yesterday issued a profit warning, and its shares fell by more than 15 per cent in early trading, wiping about £1.4billion off its stock market value
‘Energy prices are now at a record high and customers simply cannot afford to stay with suppliers who are rising prices and thus punishing loyal customers.
‘These astonishing numbers from British Gas really demonstrate that customers are savvy and switching, which is without a doubt the best way to pay less.
‘The reality of the modern energy market in the UK means that suppliers will lose customers if they charge standard prices to a lot of their base.
‘More and more customers are unafraid to vote with their feet, and this trend shows no signs of slowing.’
Centrica chief executive Iain Conn this week launched a campaign to kill off the Government’s price cap.
He also called for the cost of levies to support a switch to green energy and support vulnerable customers to be moved from bills to general taxation. Mr Conn said yesterday: ‘Although some aspects of our delivery in the second half of 2017 have been disappointing, I remain encouraged by our progress in implementing our strategy.’
n Nearly a third of households have stayed with their home insurance provider for more than five years – potentially paying more than they need to.
A survey commissioned by Citizens Advice found that 31 per cent of households have had their policy for more than five years – meaning they could be paying 70 per cent more than a new customer would, or £110 a year on average
Citizens Advice said companies can make large hikes in premiums when customers renew their existing policies rather than shopping around for a cheaper deal.
It said vulnerable consumers must be protected from the ‘loyalty penalty’.
Older people are particularly likely to have stayed with their provider, the research found.
Four out of ten over-65s have held their home insurance policy for more than five years, the poll of 4,000 people found.