Regulator Ofgem said it will work with energy suppliers to help these customers to shop around and save money.
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Regulator Ofgem said the cap would save households with prepayment meters – among the poorest customers but who pay the highest rate – an estimated £75 a year from April.
Instead, the CMA had proposed “a series of remedies”, said Mr Nolan, adding they would make the market fairer and encourage customers to switch energy suppliers. There are now 44 suppliers in the market, offering different tariffs for different needs.
Price comparison websites are also expected to be given the green light to push customers towards some deals, while hiding others that earn the site less in commission.
Mark Todd, the co-founder of switching service energy helpline customers on standard metre tariffs would remain “on square one”.
“Ofgem’s big opportunity to stand up for the common good and they have failed again”, said Labour MP Caroline Flint.
‘For the vast majority of people, there will be no protection against unfair prices, ‘ he said.
But this is a nip at the heels of the Big Six companies from a regulator which is still shying away from the fundamental reforms needed.
The measures were broadly welcomed by consumer groups although some politicians and independent suppliers said they didn’t go almost far enough to address the problem of high prices.
Suppliers argue that pre-pay customers are charged more because meters use more expensive technology.
The big six – who supply energy to nearly 90% of homes in the United Kingdom – have not yet made any formal response but will be carefully scrutinising the changes. By contrast, the cheapest one-year fix, which is offered by small supplier Avro, costs just £770 a year for the same usage – an annual saving of £296 for the typical family.
Today’s announcement follows a two-year investigation into the energy markets by the Competition and Markets Authority (CMA).
Two thirds of people are on their supplier’s most expensive tariff and potentially overpaying for energy.
Competition has been lacking in the market for some time, and a recent study by the Competition and Markets Authority (CMA) has confirmed the extent of the issue.
The CMA’s final report is a watershed moment for industry and consumers and points the way to a fairer and more competitive future.
To encourage more switching, Ofgem planned to trial “more effective prompts” on customers’ bills to encourage them to compare different tariffs.
“The regulator has made a very clear promise today that it will ensure that customers get clarity, that no supplier will consciously be allowed to confuse customers”, he said.
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Energy UK agrees that customers need to be at the heart of what the industry does.
