Energy firms agree to three day switching time
The switching process currently takes around five weeks.
The changes coming in at the end of 2014 mean that once the customer signs up with a new supplier they will still have the 14-day cooling off period, with the switch completing three days after.
Ofgem has also published new proposals to make the switching process more reliable and put next day switching in place by the end of 2018 at the latest.
According to regulator, this will be made possible by an overhaul of the IT systems behind the switching process, which have been in place since the 1990s.
Dermot Nolan, chief executive of Ofgem, said: “Consumers can switch their bank in seven days and their mobile phone in just a couple, but have to wait significantly longer to switch their energy supplier.
“We know that consumers want a reliable and efficient switching process, and that concerns about it going wrong can put them off shopping around for a better deal. So now that we have taken steps to make the market simpler, clearer, fairer, we are leading a programme which will deliver faster, more reliable switching.”
Nolan said consumers can save upwards of £200 a year by switching energy providers.
Clare Francis, editor-in-chief at MoneySuperMarket.com, called on Ofgem to go further and pointed out that the ‘three day switch’ actually takes 17 including the mandatory cooling off period.
She said: “MoneySuperMarket would like to see the energy switching happen within seven working days as it does with bank accounts, and there should then be a cooling off period where customers can change their mind. This is what happens in other areas such as insurance: you can change your mind after you have moved to a new provider.”
Gillian Guy, chief executive at Citizens Advice, added: “While switching supplier can make a big difference, particularly if you haven’t switched before, it is not the only way to drive down costs. Fair pricing from firms and energy efficient homes are also key to reducing household bills.”