Britain's energy suppliers are "competing fiercely" on a range of elements going beyond price, the market's regulator Ofgem has said.

Research published today by the watchdog finds that environmentally friendly credentials and special deals for vulnerable low-income groups are driving competition.

Around ten per cent of switchers are changing supplier because they are dissatisfied with levels of customer service, but firms are responding by improving the quality provided. Ofgem says this is reflected by falling numbers of complaints.

Meanwhile special fixed-price tariffs and internet-only deals are being offered, attracting three million and 1.2 million gas and electricity consumers respectively.

Ofgem chief executive Alistair Buchanan said he believed firms failing to deliver on service and prices were being "punished", pointing to high switching rates to show that the market is working well.

"Suppliers are responding by cutting prices, improving service and developing new energy products to attract and retain customers. But a large number of customers are still missing out on savings of up to £100 and better customer service by not shopping around," he said.

"Customers have a choice and can switch away from suppliers who offer high prices or poor service."

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