New rules 'will make switching deals easier' - 02/12/2011

New proposals from Ofgem are set to simplify the process of comparing energy suppliers to find cheap electricity and gas deals.

The regulator has laid out plans that will greatly streamline the options available to consumers and it notes this should make identifying the best deals easier than ever.

A study conducted by the organisation to establish the effect of the changes revealed that when a consistent standing charge is set by the regulator - leaving only the unit price to compare - 85 per cent of people tested were able to spot the cheapest deal in under a minute.

By comparison, when a simplified version of the current system was used, only 44 per cent of individuals were able to pick out the best value deal, while it also took those who did select correctly longer to make their choice.

The tests indicate three-quarters of people say the planned new system would make them more likely to perform an energy comparison in order to find a new supplier.

Alistair Buchanan, chief executive of Ofgem, said is also encouraging that energy providers are recognising the problems with the current system, which has led to a "growing sense of consensus forming behind the need for a simpler, more competitive energy market".

Ofgem noted that restoring customer faith in firms is essential at the current time due to high global energy prices and the need to invest £200 billion to secure future supplies and meet the nation's carbon reduction targets, which will all have an impact on the amount domestic energy users pay for fuel.

The unveiling of the reform proposals was welcomed by Consumer Focus, which said the announcement would set an "important baseline for acceptable company behaviour".

Director of policy and external affairs at the organisation Adam Scorer said the concept of a simple tariff with a common standing charge is a necessary step in making prices easy to compare, as the current market is highly confusing.

"The challenge now is for energy companies to go further and faster than Ofgem has set out, to apply these principles to all their tariffs and to do so quickly," he added.

If you want to find out more about switching energy suppliers and how you could save up to £389 in minutes, click here.

Share this story with your friends:-