Ofgem considers reversing ban on cheaper deals for new energy customers

Ofgem wants to let energy companies offer cheaper deals to new customers sooner to create more competition. These special deals are only for new customers to try to get them to switch from their current provider. Ofgem thinks it's a good time to change this rule as the energy market is getting better. They believe this change will make companies compete more, leading to lower prices and better service for customers. They are asking for opinions on when to make this change, considering market stability and risks for suppliers. The goal is to boost competition and lower prices. The current energy system in the UK was designed for companies to compete with each other and offer good prices to attract customers. But this hasn't been happening much. By removing the ban on special deals for new customers, the energy price cap could drop from £1,928 to £1,690 per year, saving customers money. This change could help people find better deals before winter. Some companies are already warning customers about higher bills, while others are launching new programs to help pay bills. In 2012, the ban on these special deals for new customers was allowed to expire. Ofgem is now thinking about letting energy companies offer these deals again to attract new customers. This could help competition in the market. The ban was put in place in April 2022 to stabilize the market after energy prices surged due to Russia's invasion of Ukraine. Ofgem believes that removing the ban could save households money by increasing competition. However, some worry that this change could bring back unfair pricing based on where people live or other factors. Overall, the energy market is facing challenges, with fewer people switching providers compared to last year. Martin Lewis from MoneySavingExpert.com believes that more competition is needed to lower prices. The energy price cap was set up to protect customers, but now it's almost the standard price. Ending the ban on special deals for new customers could help stimulate competition and bring prices down. Fuel poverty campaigners are concerned that this change could lead to unfair pricing practices.