Energy switching to take just three days
British energy consumers will be able to switch suppliers within just three days by the end of the year, under proposals from energy watchdog Ofgem.
It currently takes around five weeks, including a two-week cancellation period, to switch your energy company currently but Ofgem wants to make the process much simpler and quicker for consumers.
The speedier switching process will come with a 14-day cooling-off period in which customers can change their minds.
Ofgem also hopes to introduce next-day switching by the end of 2018 at the latest.
"Consumers can change their bank in seven days, their mobile phone in just a couple, but have to wait significantly longer to switch their energy supplier," said Dermot Nolan, chief executive of Ofgem.
"We know that consumers want a reliable and efficient switching process, and that concerns about it going wrong can put them off shopping around for a better deal.
"So following the steps we have taken to make the market simpler, clearer, fairer, we are now leading a programme which will deliver faster, more reliable switching."
Ann Robinson, director of consumer policy at uSwitch.com, welcomed the move.
"Today's announcement is exactly the sort of game-changer that is needed to encourage consumers to engage with the energy market," she said.
She added: "We've already seen the impact the introduction of seven-day switching has had on the current account market – with switching activity increasing by 14% since last September – and would hope to see a similar level of engagement as a result of streamlining switching in the energy market.
Ofgem is currently investigating anti-competitive practices in the UK energy market that harm consumers.
Announcing the probe in March, the watchdog said falling levels of consumer trust and switching between providers "is not consistent with a competitive market".
The Big Six suppliers supply around 95% of the UK's energy and British Gas alone supplies 40% of gas.
While Ofgem said it had not found evidence of explicit collusion between suppliers in fixing prices, it explained that "there is evidence of possible tacit co-ordination reflected in the timing and size of price announcements and new evidence that prices rise faster when costs rise than they reduce when costs fall".
It explained that while tacit co-ordination is not a breach competition law, "it reduces competition and worsens outcomes for consumers".
In 2009, the average annual dual fuel bill was £819 and by 2013 it was £1,350 - that's a 65% increase over five years.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
The period of time you’re allowed, after signing an agreement, to cancel it without incurring a financial penalty. Financial products including banking, credit, insurance, personal pensions and investments are subject to a 14-day cooling-off period (this is 30 days in the case of life insurance and personal pensions). The insurer or broker must refund any money paid by you within 30 days, although it has the right to deduct a reasonable admin charge, and a sum proportionate to the number of days’ cover you had. If you have any related credit agreements, these will also be cancelled.