New Competition and Markets Authority measures will help 700,000 restricted meter customers to switch without changing their meter.
Restricted meters apply different rates across different times of the day, for example customers with Economy 10 meters. But now, new measures will give restricted meter customers access to a wide range of energy tariffs more easily. Customers will now be able to switch suppliers without changing their meter, with potential savings of £154 per year.
This follows the Competition and Markets Authority’s (CMA) two-year investigation into the energy sector. The competition watchdog had identified “significant problems” in the energy market, which it felt needed “significant intervention”. It said last year that market competition is “nowhere near enough” and more needs to be done by the industry.The CMA recognised that the problems fell into three main areas: the demand side of retail energy markets, supply side of both wholesale and retail markets and the broader regulatory framework.
The CMA is demanding that suppliers offer reminders about switching through bills, contact details for Citizens Advice and further information to assist them with switching, such as their total energy usage, meter type and current tariff.
Citizens Advice and Citizens Advice Scotland are to become recognised providers of information and support to restricted meter customers.
CMA Director of Remedies Susannah Meeke said: “We want to help as many people as possible to ship around for the best energy deal for them. But many people on restricted meters have effectively been prevented from doing this because they would need to change their meter – which is both costly and a hassle.
“Now they will be able to switch like any other energy customer – and potentially lower their bill by up to £154 a year.”
UK households have shelled out an extra £7.3bn over the last five years by remaining customers of the Big Six energy firms, a new report shows.
Ofgem data compiled by energy provider Bulb found that families who held accounts with the biggest firms - including British Gas, SSE, E.ON, npower, EDF and Scottish Power - for at least five years paid out an average £853 more than they needed to over the period.
The report explained that while Big Six firms tend to offer cheaper fixed tariffs in order to "entice" new customers, the tariffs generally expire within one to two years.
At that point, customers are usually transferred to standard variable tariffs, which cost up to 30% more than their original plan.
The report went on to calculate the so-called "loyalty fee", which measures the annual price difference between the average standard variable tariff at a Big Six firm compared to their cheapest tariff.
It found that the average loyalty fee for a UK household was £852.75 over five years - with an astonishing 8.5m British homes staying with one of the Big Six firms and not switching.
Bulb co-founder Hayden Wood said: "Loyalty towards a brand is often rewarded, yet households who've put their trust for years in a single energy company are being forced to subsidise others who switch every 12 months."
He added: "These latest numbers show that so-called standard tariffs no longer have the customers' best interests at heart. The Big Six need to show that they're putting customers first, instead of profits."