Energy regulator plans to make it easier to get a better deal
The regulator has today announced a number of proposed reforms to make it easier for all to get a better energy deal.
It is calling for the following:
- A safeguard tariff for vulnerable consumers to stop them overpaying for their energy.
- A £150 price cap for pre-payment meter installation, with these charges banned altogether for the most vulnerable in society. Pre-payment meters are typically installed under warrant when a customer can’t or will not pay their energy bill.
- Easier journey for customers of price comparison sites to directly switch to the cheapest deals.
While figures from March 2017 saw a spike in switching activity (512,000 electricity and 388,000 for gas, respectively the fourth and the second highest ever in a single month since 2003), and the number of switches is at a nine-year high, Ofgem’s data reveals many people think it’s too much hassle and have never or rarely switched.
Around five million people used price comparison websites to search for energy deals last year, but less than half of those people actually went on to switch.
Currently users of price comparison sites can’t switch directly to some of the cheapest deals listed. Instead, they have to visit the supplier’s own website and re-enter their details. Ofgem wants to see customers get better access to cheaper deals, allowing them to switch directly from a price comparison site.
The regulator will also trial a ‘Check Your Energy Deal’ online switching service to help customers who have been on poor value standard variable tariffs for three years or more to find cheaper deals. They will be able to see how much they can save by entering their address and name of current supplier. The call comes as the difference between the average dual fuel standard variable tariff and the cheapest available deal for customers paying by direct debit widened to £250 in March and April 2017.
Dermot Nolan, chief executive of Ofgem, said: “Protecting vulnerable consumers is a priority for Ofgem. That’s why we are starting new work to protect vulnerable customers, including the option of introducing a safeguard tariff for them.
“Suppliers must also do more to get all their consumers, particularly those on poor value standard variable tariffs, a better deal. We are pressing ahead with a raft of reforms to make it even easier for people to switch no matter how they choose to shop around.”
‘Don’t wait for these proposals, switch today’
Stephen Murray, energy expert at MoneySuperMarket, said: “The general sentiment from today’s announcement is broadly positive, especially in relation to vulnerable customers, but ultimately the proof will be in the pudding.
“The benefits of switching should be more regularly and widely promoted by Ofgem and the government but our advice to customers is clear – don’t wait for any of these proposals to be rolled out. Switch your energy tariff today on a comparison site and you could save £300.
“It’s hassle free, take five minutes and means you can bring your bills down before winter arrives and bills go up.”