You are here: Home - Household Bills - News -

Energy regulator proposes new fixed tariff rollover rules

Written by: Paloma Kubiak
The energy regulator is proposing to allow customers who come to the end of their fixed tariff to be rolled onto another fixed deal instead of the typically pricier standard variable rate.

When an energy customer comes to the end of their fixed-term contract, the provider moves them onto their standard variable tariff which tends to be more expensive.

This requirement was put in place by energy regulator, Ofgem, to prevent suppliers from locking customers into further contracts thereby making it more difficult or expensive for them to switch to an alternative tariff or supplier.

Despite being more expensive, moving to a default tariff means there are no termination fees for switching away to a more competitive provider.

But Ofgem has announced proposals to allow suppliers to roll their customers onto further fixed-term tariffs at the end of their existing deal, as long as those tariffs come without any termination fees, are no more expensive than the default rate and only when a customer hasn’t actively engaged.

Ofgem added that the move to another fixed deal would need to be similar in nature to the current tariff, including tariff type, duration, online account management, meter type and payment method.

It said such a move would help to reduce the number of customers on poor value standard variable tariffs.

A statement from Ofgem read: “We want to make sure that competition in the retail energy market works in consumers’ interests. As part of this, we are committed to helping consumers to move away from poor value default tariffs. The change we propose to make to the rollover rules is one of a number of measures we are taking forward to help and encourage consumers to engage and get a good deal on their energy, while protecting those who can’t engage.

“By way of an example, we are taking forward work to improve the information provided to consumers, including on the end of fixed term notice, in order to help them engage and choose the right deal for them. We have already started this work by introducing principles requiring suppliers to make sure consumers get the information they need to be able to make an informed choice.”

The consultation closes on 15 September and Ofgem said it “intends to move quickly to make a decision on the way forward” and expects to issue a decision in the autumn.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week