Energy retail: opt-in and testing opt-out switching

In the December 2020 Energy white paper, the government announced plans to address the factors that have caused excessive charging in the domestic energy retail market on an enduring basis. We are therefore:

• creating the framework to introduce an opt-in switching scheme, where households on the most expensive tariffs are offered a simple method of switching to a cheaper tariff
• testing opt-out switching, where, unless they choose not to be, consumers who haven’t switched for a while are switched to a competitive new contract. This will be part of considering how default arrangements might be reformed to enable greater competition

In this consultation we set out detailed proposals and options, and we hope that stakeholders will be able to share their views on these to facilitate effective policy development.

Following this consultation and subject to Parliamentary time and approval, we plan to introduce primary legislation to set the high-level framework for these measures. The more detailed design and implementation will then follow, with further consultation. This consultation therefore primarily focuses on framework considerations. However, it is also necessary to consider some design questions at this stage to make sure that the framework is appropriate.

We have included here an analytical paper presenting some of the underlying evidence base on issues relating to the loyalty penalty and the economic rationale for the overarching policy position in the strategy.

Alongside this consultation we have published:

• an Energy retail market strategy for the 2020s
• a summary of responses to the Flexible and responsive energy retail markets consultation

See the BEIS consultation privacy notice.

Please do not send responses by post to the department at the moment as we may not be able to access them.