Martin Lewis warns Ofgem's new 'switching penalty' will protect energy firms' profits at households' expense

Martin Lewis has sharply criticised Ofgem's plan to bring back its Market Stabilisation Charge, warning it will push up the cost of cheap fixed deals and switcher tariffs if wholesale gas prices drop this winter. The MoneySavingExpert founder described the measure as "basically a form of switching penalty" that obliges any supplier that wins a customer to pay compensation to the one they left — a cost that will ultimately land on bills. Ofgem has opened a formal consultation on the charge, which could take effect as early as November, pointing to ongoing volatility driven by Middle East conflict as a threat to supplier stability. Neil Kenward, Ofgem's interim director general of markets, said the regulator is "preparing for what is likely to be a difficult winter for many households."

Lewis warned the charge means cheap fixes will cost more "in order to protect energy firms' profits."

The MSC was last active between April 2022 and March 2024 after Russia's Ukraine invasion caused more than 30 suppliers to collapse.

The charge triggers when wholesale prices fall more than 10%, forcing the gaining supplier to pay rivals 85% of the price drop.