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Ofgem: energy prices cap cut trigger a change of suppliers

The move to cut the energy price cap is expected to trigger a revival of switching between suppliers as firms bring back more competitive fixed deals – but consumers have been told not to expect “a deluge of cut-price offers”.

The price comparison website Uswitch.com claimed it was “a watershed moment” for energy suppliers, which could now look to start offering fixed deals again. Jonathan Brearley, the chief executive of the regulator Ofgem, said he was “very hopeful” that competitive fixed-price deals would return to the market.

However, some experts said things may be less straightforward than in the past. The campaigner Martin Lewis said he expected to see deals offered to existing customers as a “bespoke offer” from their supplier instead of people being able to go on a comparison site and switch to deals offered across the market.

As of lunchtime on Thursday, the website MoneySavingExpert.com said there were “no open-market fixes yet” and that it was working on rounding up what existing customer deals were available.

Switching between energy suppliers had become increasingly common in the years before the energy crisis as Ofgem tried to improve competition.

Go back three years, and there were lots of deals available – usually dual-fuel fixed-price tariffs – that people could switch to and pay hundreds of pounds a year less than the price cap level.

However, soaring wholesale energy prices from the summer of 2021 turned everything upside down, and fixed deals disappeared, with those usually priced at uncompetitive levels. Fixed-price deals typically ran for 12 or 24 months, so most, if not all, of those taken out before have expired, leaving most people on so-called default tariffs.

Brearley told BBC Radio 4’s Today programme: “The market is stabilising, and we are seeing signs that switching may return.”

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