New rules to make it easier for consumers to switch energy suppliers

Planned new rules for the UK's energy companies to work by have been roundly welcomed by consumer groups and struggling householders alike.

Following on from months of complaints that the 'Big Six' suppliers are not doing enough to help ease the growing problem of fuel poverty, the energy industry regulator Ofgem has laid out a new set of proposed guidelines.

Among the rules proposed by the watchdog is that suppliers will be required to make their tariffs as transparent as possible, including making all extra charges clear and thereby making it easier for the most vulnerable members of society such as the elderly to switch utilities suppliers and save money.

In addition, suppliers would be legally forced to issue annual statements covering, among other things, the tariff name, customer's consumption rates and, crucially, a reminder of the consumer's right to end a contract and switch to another supplier.

While many consumers will have been delighted with these suggestions, some critics have offered the proposals only a lukewarm reception, stressing that it is actions rather than words that will make the difference for the millions of households currently spending ten per cent or more of their monthly income on just their heating and lighting bills.

Robert Hammond, energy specialist for Consumer Focus, said: "Certainly this is a step in the right direction.

"Obviously it was a press release and we have yet to see the substantive detail, and I think the devil will be in the detail with this. The Ofgem press release has made all the right noises, there are lots of good words there."

He added, however, that it would make more sense for things such as tariff details and reminders of the right for a consumer to switch utilities suppliers to be included on monthly bills rather than just being held back for annual statements, while concerns have also been raised that companies could be able to get around the rules by highlighting the advantages of switching to one of their other tariffs.

At the same time, the days of consumers being charged more for opting to pay by cheque rather than direct debit could also be coming to an end.

According to Ofgem's research, households using pre-paid meters now pay up to £125 more a year for the privilege, with elderly people less able to sign up for online payments set to benefit the most from the planned changes.