And working on extending to a further two million next year
Around 1 million households will save £120 a year on average when Ofgem extends its prepayment safeguard tariff for more vulnerable people this winter.
Ofgem will work on extending price protection to at least a further 2 million vulnerable households for winter next year once the timing of the Government’s price cap is confirmed.
Following the Prime Minister’s announcement last week, Ofgem will work with the Government so that all those on standard variable and other default tariffs receive price protection as soon as possible if legislation is in place.
The Government’s plan to provide price protection to all households on default deals will reassure them that the price they pay reflects the underlying costs of supplying their energy.
People will be able to save even more money by switching to a better deal.
Ofgem will consult on the design of the safeguard tariff for default deals while the Government’s draft bill progresses through Parliament.
In the meantime, suppliers must step up efforts to get more of their customers on default tariffs onto better value deals.
Some suppliers have recently come forward with proposals to do so but more action is required.
To help with this, Ofgem is introducing new rules today to allow suppliers to roll customers coming to the end of their contracts onto another fixed deal instead of a poor value standard variable tariff.
Ofgem will be carefully monitoring to ensure any new default deals do not become another way to penalise customers who rarely switch.
Under a separate initiative to boost confidence in the switching process, Ofgem is proposing that consumers would receive automatic compensation if their switch goes wrong.