OFGEM orders Big Six energy suppliers to give customers a better deal on standard variable rates

Briitish gas and electricity market reglator OFGEM is to order energy suppliers to take part in trials to find out the best ways of helping disengaged customers get a better deal. 

The trials are one of the remedies put forward by the Competition and Markets Authority (CMA) following its energy market investigation, which found that two-thirds of customers who are on standard variable tariffs are paying far more than they need to – up to £1.4 billion.

Ofgem is working to deliver a smarter, fairer, more competitive energy market and can require suppliers to undertake trials, which will start by this summer. They will cover issues including:

  • Suppliers telling customers what the cheapest deals are across the whole market
  • Changing the name of standard tariffs, for example, to ‘out of contract’ tariffs 
  • Different ways of presenting information in domestic bills
  • Changes to information customers receive once they come to the end of a fixed deal.

Rachel Fletcher, senior partner, consumers and competition at OFGEM, said: “We must end the two- tier market where only a third of people get the best deals, while the remainder do not benefit from competition. 

“By overseeing these trials, we will make sure that suppliers are doing everything they can to test ways to help these customers find better deals. This could be through switching supplier, or helping loyal customers find cheaper tariffs with the current supplier. 

“As the market develops, we want to ensure that customers in vulnerable situations are not left behind. So we are making clear that suppliers have a special responsibility to these customers. We are proposing an enforceable principle for suppliers to make all efforts to identify and support them.” 

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