Rules which mean energy customers are sometimes given the WRONG figure for potential savings if they switch tariff or provider are set to be changed.

Regulator Ofgem has put forward a proposal to change the way 'personal projections' of your average cost over the next year – and so what you'd save switching energy deal – are calculated.

Currently the rules mean if your fix ends part way through the year, the potential savings you're told of can be overexaggerated and misleading. has called for change since Ofgem first introduced the current personal projection rules in 2014. In our Cheap Energy Club we've already introduced a workaround to ensure you can accurately compare potential future costs against what you are currently paying.

To find your cheapest deal and see if you can save £100s, use our free Cheap Energy Club.

What's the problem?

Current rules mean the personal projection you're given can be pure baloney if you're on a fix. Take this example, based on typical usage:

  • Your current fix costs £800/year and ends in four months.
  • After it ends you'll pay £1,200/year, as you'll be on your energy firm's standard tariff.
  • The personal projection assumes a constant £1,066/year cost as it's averaged over 12 months.

Thus if the market's cheapest deal is £900/yr the results will show you can switch and save £166. While correct if looking over a year, it's a bad move – switch now and you'll pay MORE for four months, so you should wait.

To combat this problem, we devised our own way of doing things in Cheap Energy Club.

Our Cheap Energy Club includes a WHOLE market comparison to find your cheapest tariff. And if you're on a fix you can toggle to see your saving against your fix's current price and what it'll be after, if you're switched onto a standard tariff, as well as the personal projection (if you're unsure it defaults to the most appropriate).

What's Ofgem changing?

Ofgem today announced its proposals for personal projections as part of a raft of changes – see the Regulator proposes cap on energy prices for vulnerable customers MSE News story for more.

Ofgem's working paper said: "We consider the current prescriptive methodology is unlikely to deliver the best outcomes for consumers either now or in future.

"[Our recommended option] provides flexibility for suppliers and comparison sites to develop their own methodologies, placing the emphasis firmly on them to deliver in the consumers' interests."

This means that comparison sites would be able to set their own way of showing your comparisons (as we already do in Cheap Energy Club), as long as some basic information such as tariffs' names and types of tariffs are included. It does, however, mean the projections you see could vary from comparison site to comparison site.

Ofgem will now consult on these plans over the summer.

Martin: 'On Cheap Energy Club we simply don't follow it because we think it's wrong' founder Martin Lewis has given his initial thoughts on the changes...

He said: "This has long been a bugbear of mine. When you get your projected price over the next year from an energy company, it has to be an average of what you would pay. Now, that becomes a nightmare for anyone who is on a fixed tariff that ends within a year.

"Comparison sites have been mandated to use this methodology, as have energy companies, and I think it's actually almost deliberate, prescriptive mis-selling on behalf of the regulator to give people the wrong information. On Cheap Energy Club we simply don't follow it because we think it's wrong.

"The proposal now is to somewhat loosen those personal projection prescriptive regulations, as long as energy companies and comparison sites adopt the general principles of showing roughly what you're going to pay over a year... which I think is a good move."

Martin added that he would like the changes to go further, with customers to be shown what they are paying during a fix and what they will pay after the fix ends. As things stand Ofgem's proposal could mean customers are shown different personal projections on different comparison sites, depending on how each one does its calculation.

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