Campaigners have welcomed changes introduced on New Year’s Day, forcing energy companies to simplify their tariffs so it is easier for customers to find their best deal.

Ofgem has banned power suppliers from offering complex tariffs – telling them they must offer only four for gas and four for electricity – as part of reforms to make energy prices easier to understand.

From April, energy firms will also be expected to tell their customers which tariff is cheapest for their needs when they send out bills and annual statements.

Jean Walker, founder and chairman of Bradford and District Senior Power, said many older people in the district struggled to understand energy prices and the move was a “step in the right direction”.

“I welcome anything that makes things easier for older people. It can be quite a chore when you’re on your own and in this technological age to deal with things like tariffs.

“To be honest, you can be put off and think ‘I just won’t bother’ and that can mean you end up paying more.

“I think energy companies need to look at other ways of making things easier for customers.

“It’s such a serious issue.”

The ban on complex tariffs follows the introduction of Ofgem’s rules for fixed-term tariffs in October, which ban suppliers from increasing prices on fixed-term tariffs.

Companies were also banned from automatically rolling householders on to another fixed-term offer when their existing one ends.

Andrew Wright, Ofgem chief executive, said: “It is getting easier for consumers to get a better energy deal and by April further help will arrive in the form of much clearer and personalised information.

“The aim of our simpler, clearer, fairer reforms is to ensure competition bears down hard on prices. Profits are not an entitlement. They should be earned by companies competing keenly to offer consumers the lowest prices and the best service.

“Now it is up to suppliers to build on our reforms to restore consumer confidence in the energy market. There are good signs that they are taking up this challenge.

“Ofgem will produce an annual report to consumers on the health of competition in the market. We will not hesitate to take further action if we see evidence of further barriers to competition.”