The Prime Minister has unveiled a sweeping new crackdown on bad behaviour in the energy market, promising working families faster, fairer compensation and stronger rights when suppliers fail them.
Under the current system, consumers must wait up to eight weeks for a company to respond to a complaint.
If nothing happens, they must then refer their own case to the Energy Ombudsman – a process that puts all the pressure on the consumer and sees many miss out on money they’re owed simply because they’re too busy or too fed up to fight.
That ends now. The government is shifting the burden off consumers and onto companies, with a bold package of reforms designed to put power back in the hands of the public.
The new measures will:
- Cut the wait to escalate complaints from eight weeks to four
- Make referrals to the Ombudsman automatic rather than manual
- Expand automatic compensation to cover more common issues – like long call waits, botched billing and ignored complaints
- Increase the base level of compensation from £40 for the first time in over a decade
- Strengthen the Ombudsman’s authority so suppliers must comply with its decisions or pay up
Minister for Energy Consumers Miatta Fahnbulleh said:
Through our Plan for Change we are delivering an energy market consumers can trust, putting an end to unfair practices, holding suppliers to account, and ensuring that the consumer always comes first.”
The move follows the government’s expansion of the Warm Home Discount, which will see 2.7 million extra households get £150 off their bills this winter.
Ministers say it’s part of a wider mission to cut the cost of living and rebuild trust between families and their energy suppliers.
Alongside the compensation reforms, the government is also reviewing Ofgem’s role – with an eye on making it more consumer-focused, more accountable and more aligned with its clean energy goals.
That includes boosting protections for families investing in home upgrades like heat pumps or solar panels and removing red tape that holds back private sector investment in critical infrastructure.
Responding to the changes Energy Ombudsman‘s Ed Dodman said: “The impact of this, as well as the automatic referral to our service, will be to remove the burden from consumers and make the overall experience much better.
“It will ensure that all consumers who could benefit from using Energy Ombudsman, have the same opportunity to do so, creating a fairer and more accessible process for all.”
However Energy UK worries the cut to four weeks doesn’t give energy companies enough time to resolve matters themselves.
Deputy Director Ned Hammond said: “It’s absolutely right that customers have effective redress when things go wrong and it should be the suppliers that are the primary route for resolving complaints successfully.
“The changes proposed, such as reducing the length of time for references or automatic referrals to the Ombudsman, threaten to undermine that important principle and in turn, customer confidence in their supplier.”
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