Government Confirms Ofgem to Regulate Energy Brokers and TPIs
The 23rd of October 2025 marked a key step towards improving fairness and transparency across the non-domestic energy market, as the Department for Energy Security and Net Zero (DESNZ) published its official response to last year’s consultation on regulating Third-Party Intermediaries (TPIs), including energy brokers and price comparison services. Following extensive industry feedback, the Government confirmed its intention to introduce direct regulation for TPIs, appointing Ofgem as the dedicated regulator once parliamentary time allows.
Context
We know that TPIs play an important role in helping businesses and households secure energy contracts suited to their needs.
While many TPIs operate responsibly, a government consultation published in November 2024 highlighted persistent issues faced across the industry, particularly for small and micro-businesses, where hidden commissions, mis-selling and poor complaint handling have led to consumer detriment.
These practices, attributed to a minority of ‘unscrupulous’ market participants, are thought to have damaged confidence in the sector, warranting further legislative and regulatory control.
Ofgem Appointed as Regulator For TPIs
The Government intends to legislate for a “hybrid” authorisation model, combining the flexibility of a general authorisation regime with a formal registration process. Once established, all TPIs arranging energy contracts will be required to register with Ofgem and meet “fit and proper person” criteria before operating in the market.
For existing TPIs already operating in the market, a 12–18-month “sunrise period” will run before the framework becomes mandatory, after which TPIs will not be able to operate in the market without Ofgem authorisation.
Ofgem will also be empowered to set clear principles and specific rules for TPI behaviour, monitor and investigate market practices, order consumer redress where harm has occurred, and levy fines or exclude non-compliant firms from the market.
Regulation Cost Recovery
The cost of regulation will be recovered directly from the TPI sector through proportionate annual fees, encouraging compliance and cooperation to reduce overall costs rather than through gas and electricity suppliers, which DESNZ recognised would transfer the full cost of regulation to all energy consumers.
Improved Protections For All Consumers
Under the proposed framework, both domestic and non-domestic customers will benefit from stronger protections. These will include mandatory access to independent Alternative Dispute Resolution (ADR) TPIs engaging with Microbusinesses and Small Businesses Consumers, transparent commission structures, clearer contract terms for business customers, and prohibitions on biased or deceptive procurement practices. The framework will also require fair treatment of micro-businesses and vulnerable consumers, ensuring consistent service standards across the market.
For domestic customers, the regulation will bring oversight of auto-switching services and price comparison sites, ensuring that switching decisions prioritise customer benefit rather than commission incentives.
Enabling a Fair, Consumer-Centric Future
The reforms support the Government’s broader ambition to create a clean, competitive and consumer-focused retail energy market aligned with the UK’s transition to a smart, flexible and decarbonised energy system. By formalising Ofgem’s oversight of the broker market, the Government aims to professionalise the sector, strengthen accountability, and create a level playing field for ethical TPIs committed to supporting their customers’ best interests.
Next Steps
Although implementing regulation for a currently unregulated sub-section of the market is likely to take some time, Ofgem will conduct a detailed market survey, which is expected to commence in the first half of 2026, to better understand the structure and scale of the TPI sector.
Once legislated as the regulator via parliamentary processes, Ofgem will publish high-level principles for TPI conduct and develop detailed registration and compliance requirements. Following this, the 12-18 month “sunrise period” will then begin, allowing TPIs to register before the framework becomes full mandatory.”
The forthcoming regulation marks a significant milestone in consumer protection and market reform. It seeks to eliminate poor practice, reward transparency, and empower consumers to engage confidently with the energy market, while simultaneously enabling reputable TPIs to thrive in a fair, trusted, and professional environment.
We intend to monitor ongoing regulatory developments and Ofgem’s forthcoming implementation plans closely, ensuring our valued partners and customers are informed and engaged.
For further details, the full government response is available at www.gov.uk/government/consultations/regulating-third-party-intermediaries-tpis-in-the-retail-energy-market
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