The Week Unzipped: Keep it simple, Ofgem warns energy firms

ENERGY regulatory body Ofgem has warned companies to simplify their tariffs and make way for new competition, to prevent customers being left bamboozled by complex and unfair energy bills.

Ofgem claims competition in the UK energy market is stifled through complicated tariffs and a lack of transparency. The regulator plans to force the big six firms to auction off up to a fifth of the electricity they generate to make room for new companies. The regulator also wants to ban automatic rollovers of fixed contracts so customers are not repeatedly tied in to long-term deals.

Ofgem will refer firms to the Competition Commission if they fail to comply with the new system.

Price comparison service uSwitch.com last week launched a scheme to advise households that are not online on how to get the best energy deal. Customers can post their energy bills for free to uSwitch.com and a trained adviser will phone and talk them through their options.

The "send us your bill" scheme is aimed particularly at elderly and vulnerable households and those who struggle to understand their energy bills.

Interesting bonds

BM Savings launched two new inflation rate bonds which pay the rate of annual inflation plus a fixed interest rate of 0.75 per cent for a three year term or 1.5 per cent for five years. The bond tracks inflation as measured by the retail prices index. In the event of deflation investors will receive their full capital plus the fixed interest rate. Savers can deposit between 500 and 1 million with no withdrawals permitted. The offer runs until 16 May and the bond starts 1st June. From the opening date until the start date savers will earn a fixed interest rate of 0.5 per cent.

Pensions protected

The Pension Protection Fund took control of 41 more schemes in February. A further 6,626 people in the UK are receiving compensation or will do so in the future. The PPF has now paid out 246 million and more than 62,000 people are receiving or will receive compensation in the future.

Rock rate down

Northern Rock has cut interest rates in its everyday mortgage range by up to 0.11 per cent. Fixed rates for customers with a 30 per cent deposit start at 3.39 per cent with a 995 fee. Buyers with smaller deposits can fix into a 90 per cent loan-to-value two-year deal at 5.88 per cent with no product fee. The mortgages allow overpayments of up to 10 per cent each year and the option of payment holidays.

Sainsbury's savings

Sainsbury's Finance launched three new fixed-rate savings accounts paying up to 4.05 per cent. The accounts are available in one, two and three-year options, paying 3.25 per cent, 3.75 per cent and 4.05 per cent respectively. The accounts can be opened online or by telephone with a single deposit of between 5,000 and 50,000. Withdrawals are not permitted during the fixed term.