Today, Ofgem has announced its commitment to creating a simpler, clearer and fairer energy market. The energy regulator has promised to enforce tough new standards of conduct this summer, which will ensure suppliers treat consumers fairly.
Ann Robinson, Director of Consumer Policy at Uswitch.com, says: “These measures are in danger of falling short of delivering a healthy, competitive market. Consumer engagement in the energy market is at an all-time low, so while we welcome any move that will make it easier for households to shop around for a better energy deal, there also needs to be a spur. We want to see consumers actively encouraged and supported in shopping around across all suppliers – it is vital that suppliers still have a reason to compete. Competition forces prices down and leads to improved products and services. Consumers also need to be encouraged to shop around if we are to continue to see small suppliers and new entrants come into the market and thrive, providing a healthy challenge to the big six and a viable alternative for consumers.
“We are also urging Ofgem to introduce Annual Renewal Notices on energy tariffs, similar to those on car and home insurance. These would be an annual prompt to check the market to see how your current deal compares, and our research shows that this would be a popular move with the vast majority of consumers. Finally, we want to see strong success criteria that measures the impact of reforms on switching across suppliers. This would help to get competition moving, which is the best way to help consumers and enable them to enjoy lower prices and better products and services.
“The reforms will give consumers clearer and simpler information and will force suppliers to be a lot more upfront with their customers about their cheapest deals. However, it’s vital that consumers are not simply encouraged to act upon what their supplier says – they should always be prompted to seek an independent and impartial comparison of the whole market to see if they could get a better deal elsewhere. There is currently almost a £250 difference between the cheapest and most expensive tariffs on the market. Given the high cost of energy today, consumers can no longer afford to be missing out on such savings.
“Consumer education is key – we urge Ofgem to now undertake a programme so that all consumers are fully equipped to understand how to get good value from the competitive energy market. This will overcome concerns, get rid of the myths and give people the confidence to behave as consumers.
“These reforms are vital as consumers deserve a market that works for them. But the only way of knowing if the reforms are successful is to see what happens to consumer engagement. If switching between suppliers goes up, then the measures are working. If switching goes down, the measures are failing – it has to be as black and white as that.”
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Uswitch is the UK’s top comparison website for home services switching. Launched in September 2000, we help consumers save money on their gas, electricity, broadband, mobile, TV, and financial services products and get more of what matters to them. Last year we saved consumers over £373 million on their energy bills alone.
Uswitch is part of RVU, a new business that also owns Money.co.uk and Bankrate.
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