Ofgem bans ‘complex tariffs’

The energy watchdog Ofgem have put down new rules that will ban confusing and complicated energy tariffs. The ban came into effect on 2nd January 2014.

New rules

The new rules mean that once a consumer has decided how they will pay, the energy provider can offer no more than four tariffs for gas and four for electricity. This will make it much easier for customers to compare plans and find the best deal.

From April 2014 energy providers will be forced to give clearer information to consumers. Bills, annual statements and so on will have to explain which tariff is the cheapest. This could bring an end to energy companies profiting from confused customers.

Simpler, clearer, fairer

Ofgem Chief Executive Andrew Wright said “It is getting easier for consumers to get a better energy deal and by April further help will arrive in the form of much clearer and personalised information.

“The aim of our simpler, clearer, fairer reforms is to ensure competition bears down hard on prices. Profits are not an entitlement, they should be earned by companies competing keenly to offer consumers the lowest prices and the best service.

“Now it is up to suppliers to build on our reforms to restore consumer confidence in the energy market. There are good signs that they are taking up this challenge.”

How will these changes affect me?

The changes are expected to drive energy prices down, as it will be easier to find the cheapest tariff. Ofgem have estimated that a households who have never switched can save more than £200 per year.

Further information

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