The UK energy regulator will launch its own price comparison site and safeguard tariffs to protect vulnerable consumers who are overpaying for their energy. The site and tariff plans fall under the regulator’s new measures.
The new ‘Check Your Energy Deal’ online switching service is aimed at customers who have been on poor-value standard variable tariffs for three years or more. This will now give them the opportunity to search for better deals.
Protecting vulnerable customers
Ofgem also plans to cap at £150 how much suppliers can charge customers for installing a pre-payment meter under warrant – which can occur in situations when a customer has failed to pay an energy bill – and even ban these charges completely for those most vulnerable customers.
Dermot Nolan, Chief Cxecutive of Ofgem, said in a statement: “Protecting vulnerable consumers is a priority for Ofgem. We are committed to ensuring that the more disadvantaged in society are not left behind as we move towards a smarter, more competitive energy market.”
Commenting on Ofgem’s price comparison initiative, Alex Neill, Managing Director of home products and services for UK consumer association Which?, said: “Millions of hard-pressed customers are overpaying for their energy and suffering due to a lack of competition in the energy market. More help for the most vulnerable customers and steps to make switching easier are welcome.”
Swifter switching for energy consumers
Ofgem also proposes to make changes to the current price comparison websites. The regulator wants to make switching easier for the consumer. Currently, consumers are unable to switch directly to some of the cheapest deals listed and have to visit the supplier’s own website and re-enter their details. However, the new rules would enable them to switch directly from a price comparison site.
Nolan explained: “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.”
Energy supplier switching rate improving
The rate of UK energy consumers switching between suppliers reached a six-year high in 2016, according to Ofgem which reported that 7.7 million switches took place last year, up by 1.7 million or 28% on 2015.
Ofgem has been encouraging customers to switch, advising them that savings can be made away from standard variable tariffs.
Its latest figures showed the switching level at around 15.8% of gas and electricity customers, the highest since 2010.
Of these, 47% were to small or medium suppliers outside the Big Six of British Gas, SSE, Npower, EDF, Eon and Scottish Power.
Despite these figures, Ofgem is still concerned about the two-thirds of customers who remain on standard variable tariffs.
Ofgem says that it will also be writing to customers – including people who are vulnerable and not online – about cheaper offers from rivals to prompt them to shop around.