MSE News: Plan to introduce charges for switching energy supplier "ain't good for consumers"

MSE_Haris

Energy firms could soon be forced to pay your old supplier when you switch away from it under new plans announced by energy regulator Ofgem this morning (16 Oct). The charge is designed to prevent energy firms from going bust amid soaring energy prices, yet MoneySavingExpert.com founder Martin Lewis says this is a bad idea that will "dampen competition" and make tariffs for switchers more expensive.

Read the full story:

https://www.moneysavingexpert.com/news/2026/10/martin-lewis-ofgem-energy-charge/

Broadwood

Basically these new rules will make it more difficult and more expensive for us to switch tariffs within contract if the wholesale price drops dramatically.

It protects the suppliers who will have bought wholesale 12 months in advance. So they are allowed to make profits in the good times but protected from losses if prices drop.

Meanwhile consumers get shafted either way. 😠

MeteredOut

I wonder if it could also end up in an increase in Exit fees for fixed tariffs.

I know people who don't know otherwise will jump in with "but they make millions in profits", but I for one think its good that the regulator are trying to ensure suppliers don't fail during times of volatile worldwide energy prices.

Netexporter

https://forums.moneysavingexpert.com/discussion/comment/82170625#Comment_82170625

I'm inclined to agree. People have short memories. It wasn't so long ago there were over 70 suppliers but most disappeared overnight in previously volatile times. Suppliers may make a lot of money, that's because they are large companies, but the margin on each customer account is pretty small.

Ningaloo

was looking at a fixed rate yesterday and its disappeared since this announcement. Must be revaluing their rates. Wish I fixed yesterday now.

debitcardmayhem

https://forums.moneysavingexpert.com/discussion/comment/82170665#Comment_82170665

Unlikely , the fixes are changing several times a month/week

Swipe

Looks like referral fees for switching may well dry up and be used for this charge instead.

Netexporter

That's the end of energy themed channels on Youtube, then!

Xbigman

I don't rate OFGEM very highly but they do look at both sides of the equation whereas Martin Lewis only looks at one side. A systemic threat from a big drop in prices should be addressed. This proposal is one way of doing that but it does look like it would stifle competition. The problem OFGEM faces is that they can't change existing terms and conditions of a supply contract, they can only dictate what NEW terms and conditions must be, thus making the gaining supplier liable in any changes.

If anyone has a better idea I'd like to hear it. I don't.

Darren

M1kes

This just proves (not that it was needed) that ofgem works for the interests of the energy companies and NOT the consumer.

Ultimately It will limit choice and reduce the available tariffs to consumers. New entrants to the market trying to build a customer base will be effectively stifled by this proposal, the exact opposite of what it's claimed to be.

MWT

https://forums.moneysavingexpert.com/discussion/comment/82170607#Comment_82170607

This isn't new, it was last active between 14/4/22 - 31/3/24