Cheaper energy deals for switchers delayed as regulator maintains ban
Rules that prevent energy firms from offering cheaper deals to new customers will remain in place until March 2025, regulator Ofgem has confirmed. It means you're less likely to be able to cut your bills by switching supplier for the time being – though there are still some deals worth considering now.
The 'ban on acquisition-only tariffs' was introduced by Ofgem in April 2022 during the height of the energy crisis, and was designed to stop energy firms from offering low prices to win new customers when there was so much volatility in the energy market.
Earlier this year, Ofgem launched a consultation on whether to lift the ban by October 2024. However, it has now confirmed that this won't happen, and the ban will stay in place until at least 31 March 2025.
The regulator said the responses it had received showed "a strong feeling against short-term cut-price tariffs that shut out a supplier's existing customers". It added that retaining the ban would mean customers "don't have to keep moving to chase the best rate".
Martin Lewis: 'We need to stimulate competition and bring prices down'
MoneySavingExpert.com founder Martin Lewis has previously argued that the ban should be lifted as soon as possible, so that energy bill payers can get access to better deals and start making savings. Here's what he said when Ofgem launched its consultation:
Martin Lewis, founder of MoneySavingExpert.com, said in May 2024: "The energy market is broken. We need anything possible right now to stimulate competition and bring prices down.
"In March, I was staggered when Ofgem told me 'there is evidence that removing the acquisition-only tariff ban would benefit consumers', but didn't remove it 'in case it was moving too quickly'. I disagreed and said we should throw the kitchen sink at getting people cheaper deals. So, this is better late than never.
"In normal times I wouldn't call for firms to be allowed to offer new customers cheaper prices than existing, yet these aren't normal times. The current UK retail energy system was built on the premise that firms would fight each other for customers and compete on price – yet that's hardly happening.
"Most firms are currently happy to sit on their existing customers and profit – where once you could switch and save 30%, now it's a few percent at most. So in reality the Price Cap, set up as a remedial backstop rate, is now pretty much the price."
Check if you can save by switching now
Despite the ban, there are still some deals worth considering at the moment. Based on current predictions for the Energy Price Cap, if you find a fix for up to 9% more than the current July to September Price Cap, then you should save over the year, as the Cap is expected to increase by even more than this over the next 12 months. Check our regularly-updated 'Should you fix your energy?' guide to see what deals are available now.
Plus, if you're still on the Price Cap, our Cheap Energy Club comparison will give you a bespoke prediction of what it'll cost you over the next year, so you can compare that with fixing (though our comparison's currently only optimised for dual-fuel price-capped monthly Direct Debit users – we're working on improving that).