Energy providers are to begin contacting customers each year to informing them of the best deals available to them.
The move, to be announced formally by Deputy Prime Minister Nick Clegg today, is estimated to save customers up to £100 a year and make it easier for people to shop around for cheaper deals.
Seven out of 10 people are currently not on the best deal and in 2010 75% did not switch providers. The agreement comes after growing pressure from consumer groups and government ministers to increase competition in the energy market.
Customers saw increases of up to 18% in their gas and electricity bills last autumn which were blamed on higher wholesale prices. However, despite the Big Six - British Gas, E.on, nPower, Scottish and Southern Energy, EDF and Scottish Power - cutting tariffs earlier this year, prices are still higher than they were a year ago.
[widget:10667] The Big Six, which supply 99% of customers, will all be required to inform customers of the most appropriate tariff for them from this autumn.
"We need to get bills as low as possible. I know that many families are struggling with rising energy bills. We can't control volatile world energy prices. But we can still help people get their bills down," Clegg will say in his announcement.
As the energy companies will only need to inform customers of their own tariffs, ministers have also told the providers to simplify their pricing systems to make it clearer and easier for people to shop around for cheaper deals.