From the end of 2014, customers will be able to switch energy suppliers in just three days following a two-week cooling off period.
It means customers will have a greater degree of control when deciding upon which gas and electricity suppliers to use as the time taken to switch will be halved.
Currently, it takes five weeks to switch – a period of time that includes a two week cooling off period – although the change has now been confirmed by Ofgem.
The energy regulator revealed the new switching time frame will apply from December 31 and it is designed to boost competition and help households to save money.
Helping households find the best deals
According to Ofgem, a target of next day switching is in place for 2018 at the latest – a move that will drive competition in the energy sector.
Ofgem chief executive Dermot Nolan said: “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.
“We hope this will give consumers more confidence to get out there and start shopping around.”
Research from earlier in 2014 revealed that two-thirds of energy customers in the UK had never switched energy suppliers.
Driving competition in the energy sector
In addition to that, many contracts were outdated and were causing consumers to pay considerably more than was necessary for their energy.
The introduction of smart meters and other technology will further boost the process while next day switching will require an overhaul of old IT systems, states Ofgem.
As well as driving competition among the leading suppliers, the latest move should also encourage consumers to engage with suppliers in search of the best deals.
The government has pushed for quicker switching for some time in the hope that it will drive competition and end the dominance of the ‘big six’ on the market.
Increasing payment options
Greater payment options are also helping customers to find the best deals, with debit and prepaid options available to help control energy spending.
A prepaid card is a great way of ensuring you don’t spend more than you would like and also means that customers can keep a good record of the amounts they spend on energy.
The use of such a card limits spending to the amount on it at any given moment and is not directly linked to a bank account, making funds safer as a result.
The cards can easily be topped up or replaced if required, while accounts can be checked regularly online if needed.