Tuesday 4 October 2022
New Ofgem measures set to help microbusinesses
According to Government data, by 2020 there were over 5.7 million microbusinesses operating in the UK. At the time, that accounted for 96% of all UK businesses and a significant proportion (£3.4bn) of energy expenditure. This is why they have since announced new proposals designed to make it easier for millions of customers to access to better deals.
The review in brief
Many microbusiness customers look to energy brokers to shop the market and get the best energy deal on their behalf. For the vast majority, this is a mutually beneficial relationship that is good for the industry. However, the review found that some practices could be improved upon, particularly around the transparency of commission fees.
So, what’s changing?
The new Ofgem measures come into effect on 1st October and include:
- Increased broker fee transparency
Microbusinesses will now see broker commission fees before agreeing a contract, and energy suppliers will include the fees within the contract pack that’s sent to customers once it’s agreed. - Access to an independent dispute resolution service
As part of the review, Ofgem has worked alongside Ombudsman Services to launch an Alternative Dispute Resolution Scheme designed to further support microbusinesses. It goes live on 1st December, and after this date, energy suppliers can only work with brokers who have registered. - Freedom to switch without giving notice
Microbusinesses no longer need to give a termination notice for when then intend to move to a new energy supplier after their current contract ends. - Increased access to market information
Ofgem is working closely with Citizens Advice to make new and updated guidance on how the market operates easily accessible to microbusinesses, so they always know their rights.
You can find more information about the new measures here.
