UK Energy Brokers Move Towards Regulation as Ofgem Prepares New Framework

Britain's energy brokerage sector is approaching the most significant structural change in its history. Ofgem launched a formal review of the third-party intermediary market in June 2026 and confirmed in July that it is preparing to regulate the sector, which covers the brokers, consultants, comparison websites and auto-switching services that arrange energy contracts on behalf of households and businesses.

The move follows the Department for Energy Security and Net Zero's response to its consultation on the sector, published on 23 October 2025, which confirmed the government's intention to appoint Ofgem as the dedicated regulator once parliamentary time allows. Ofgem's call for input closed on 16 July 2026. Once legislation is passed, the regulator is expected to publish high-level conduct principles before developing detailed registration and compliance requirements, followed by a sunrise period of 12 to 18 months in which intermediaries can register before the framework becomes mandatory.

One detail illustrates how far outside the regulatory perimeter the sector has sat. Nobody knows how many intermediaries there are. Establishing the number, and whether any hold significant market power, is among the stated objectives of the review itself, alongside understanding the range of business models in use and the barriers to entry that exist. Successive reviews have pointed to hidden commission, unclear fee disclosure and high-pressure sales practices, with small businesses identified as the group least equipped to scrutinise the terms they are offered.

Commission transparency sits at the centre of the review, alongside sales practices and how outcomes vary between different types of customer. Most intermediaries are paid through a commission built into the unit rate and collected by the supplier, which means the cost is real but invisible unless the customer thinks to ask. Any requirement to display it separately would let a business distinguish what it pays for advice from what it pays for its business gas https://www.purelyenergy.co.uk/business-gas supply.

Reaction across the sector has been mixed, though established consultancies have broadly welcomed the direction. Firms that already publish their margins have argued that mandatory disclosure removes a competitive disadvantage rather than creating one. Warrington-based consultancy Purely Energy, https://www.purelyenergy.co.uk/ which holds B Corp certification and ISO 9001 accreditation, is among those that have supported transparency requirements ahead of any statutory obligation to adopt them.

Ofgem is expected to publish a final report on the market in winter 2026/27, and primary legislation will be required before it can exercise formal oversight, so the timetable remains dependent on parliamentary scheduling. For anyone renewing a business electricity https://www.purelyenergy.co.uk/electricity or gas contract in the interim, the practical guidance is unchanged: ask what commission is included in a quoted rate, and ask for it in writing.

Frequently asked questions

What is a third-party intermediary in the energy market?
A third-party intermediary, or TPI, is any business that helps customers arrange or manage energy contracts without supplying energy itself. The category includes energy brokers, procurement consultants, price comparison websites and auto-switching services.

Are energy brokers currently regulated in the UK?
Not directly. Brokers operate outside Ofgem's licensing regime, and participation in industry codes of practice has historically been voluntary. The government has confirmed its intention to change this by appointing Ofgem as the sector's regulator, subject to legislation.

How are energy brokers paid?
Most are paid through a commission built into the unit rate the customer pays, collected by the supplier and passed on. Because it is embedded in the rate rather than invoiced separately, customers often cannot see it unless they ask. Requiring separate disclosure is one of the central proposals in the reform package.

Sources
Energy Live News, Ofgem on regulating brokers: https://www.energylivenews.com/2026/07/08/ofgem-promises-to-regulate-brokers-without-undermining-the-market/
Ofgem, TPI market review call for input:
https://www.ofgem.gov.uk/call-for-input/third-party-intermediaries-tpis-market-review
DESNZ, Regulating Third-Party Intermediaries consultation: https://www.gov.uk/government/consultations/regulating-third-party-intermediaries-tpis-in-the-retail-energy-market

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