Source: MoneySavingExpert, “Martin Lewis: Plan to introduce charges for switching energy tariff ‘ain’t good for consumers’”, published 16 October 2026. Consultation detail confirmed directly on Ofgem’s own Market Stabilisation Charge activation consultation page (published 16 October 2026, responses due 29 October 2026).
Our view
Ofgem is not proposing a new charge on your bill. It is proposing to switch back on a rule that limits how much of a future wholesale price fall reaches switching deals. The rule only applies when wholesale prices fall sharply, which is not happening now. Martin Lewis says Ofgem has “made up its mind” and the consultation is a formality; on that basis we treat it as likely to go ahead.
What has been proposed
The mechanism is called the Market Stabilisation Charge (MSC). Ofgem built it in 2022 and ran it continuously from April 2022 to March 2024, during the period when soaring wholesale prices pushed more than 30 energy suppliers out of business. It works like this: if wholesale prices fall more than a set threshold below the level baked into the Price Cap, any supplier that wins a customer away from a rival through switching has to pay that rival a share of the saving, rather than the saver keeping all of it. The two numbers that set how hard it bites are a 10% threshold (the first 10 percentage points of any wholesale price fall are unaffected) and an 85% derating factor (the supplier gaining the customer must hand over 85% of whatever the fall is beyond that 10%). Both figures come from the 2022 version of the charge — the threshold was tightened from 30% to 10%, and the derating factor raised from 75% to 85%, specifically to make the charge bite harder during the last crisis. Ofgem’s consultation, published this morning and open for responses until 29 October 2026, proposes reactivating the charge using those same settings, citing recent wholesale price increases and a wish to protect the market against sudden swings.
Ofgem has been explicit that reactivating the mechanism doesn’t itself create a charge on anyone’s bill or guarantee prices rise — payments between suppliers only happen if wholesale prices actually fall sharply enough to cross the threshold, which is not the current situation. Prices are elevated, with the confirmed Price Cap for 1 October to 31 December 2026 sitting at £1,723 a year for a typical dual-fuel household on Ofgem’s figures, and a forecast rise to around £1,999 for January still working through the system. The charge does not add a cost this winter.
Illustrative figures only, built from the charge’s own confirmed 10% threshold and 85% derating factor — not today’s real Price Cap, to keep the mechanism itself clear.
- Say the Price Cap assumes £1,000 of wholesale energy cost for a typical household, and the real wholesale price then drops to £800 — a 20% fall.
- The first 10% of that fall (£100) is below the threshold and changes nothing between suppliers.
- The remaining 10% (another £100) is where the charge applies: the supplier gaining your custom owes your old supplier 85% of £100, or £85.
- That £85 is money that would otherwise have gone toward a cheaper switching deal for you; instead it goes to the other energy company.
What it means for a household
Your bill does not change today. If you are waiting on the price cap for wholesale prices to fall and cheap switching deals to follow, this proposal would make those future deals smaller, because part of any wholesale saving would go to the supplier you leave.
It makes comparing deals on today’s terms more useful than waiting for a future discount. A fixed deal that beats the £1,723 cap now is a saving you can measure; a bigger future saving depends on wholesale prices falling sharply and that fall reaching you, and the proposal limits the second part.
Two things to do this week
- Check whether a fixed deal beats your current rate, on today’s numbers. Use Ofgem’s own, free guidance on switching energy supplier to compare what’s available against the confirmed £1,723 typical cap. If a fix beats the cap for your usage, the saving does not depend on the outcome of the consultation.
- If you plan to switch when prices fall, have another plan too. Our cutting your bills guide covers savings from using less energy.
What is still uncertain
The consultation closes on 29 October 2026, and Ofgem hasn’t published a confirmed activation date beyond that — Martin Lewis’s reporting suggests it could be switched on as early as November 2026 if Ofgem proceeds as expected, but that isn’t yet an official date. It’s also not yet known whether Ofgem will adjust the 10% threshold or 85% derating factor from their 2022 settings as part of this activation, or keep them as proposed. And because the charge only ever activates when wholesale prices fall sharply enough to cross the threshold, nobody can currently say when — or whether — it will do anything at all this winter. We’ll come back to this once Ofgem publishes its decision.
Our piece on January’s forecast price cap rise covers the next cap, and what the E.on-Ovo takeover means if you’re one of the customers affected by that separate change. If energy costs are part of wider money worries, free and independent help is available today from MoneyHelper, StepChange and National Debtline.