Your business energy contract is about to run out, and you have got two emails open. One is from a broker offering to handle everything for you. The other is from a supplier's website, inviting you to get a quote in five minutes. Which one actually gets you the better deal?
It is a fair question, and in 2026 it comes with a new twist. Ofgem, the UK's energy regulator, is in the middle of the biggest overhaul the broker market has ever faced. More than 2,000 broker and consultancy firms currently operate in the UK with no formal oversight, and years of complaints about hidden commissions and confusing sales calls have finally pushed the government to hand Ofgem new powers over the brokers, consultants and comparison sites that arrange energy deals for UK businesses.
None of this means you have to pick a side. It does mean the old assumptions, that brokers are all pushy middlemen, or that going direct is automatically cheaper, are worth revisiting. This article breaks down what a broker actually does versus switching direct, what Ofgem's new rules change in practice, and how each route affects the business electricity rates and gas prices you end up paying, with real numbers and a couple of practical examples along the way.
Broker or Direct? What These Two Routes Actually Mean
The two terms get used loosely, and the difference matters more than people think.
What does an energy broker do?
Ofgem's term for a broker is a third-party intermediary, or TPI, a category that also covers price comparison websites, energy consultants and auto-switching services. A broker contacts suppliers on your behalf, gathers quotes from across the market, and helps you choose and sign a contract.
Most brokers work under a Letter of Authority, or LOA, a document that lets them speak to your current supplier, view your consumption history and contract end date, and request quotes on your behalf. A properly run broker cannot lock you into a contract without your agreement. The LOA grants access and negotiating rights, not a blank cheque to sign on your behalf.
Brokers are usually paid by commission. Rather than sending you an invoice, the fee is typically built into your unit rate as a small uplift, a few pence added to every kWh you use. That is exactly the detail Ofgem's reforms are aimed at, so it is worth understanding before you sign anything.
What does switching direct mean?
Switching direct means going straight to a supplier, Octopus electricity, British Gas, E.ON Next or another provider, and arranging your business electricity rates with them yourself, with no broker in the middle. You request the quote, negotiate the contract, and deal with the supplier's account team directly if something goes wrong later.
Neither route is automatically the smarter choice. A broker can save you time and put a wider slice of the market in front of you in one go. Going direct means fewer parties involved and, in some cases, a clearer view of exactly what you are being charged and why.
What's Changing? Ofgem's New Rules Explained
This is the part that is genuinely new for 2026, and it is worth understanding even if you have never used a broker in your life.
The road to broker regulation
Ofgem does not currently regulate energy brokers directly, which is part of why the market has room for bad practice alongside plenty of honest operators. Here is how that is changing.
Ofgem's phased approach to regulating energy brokers and other third-party intermediaries. Dates from 2027 onward are Ofgem's stated expectations and depend on parliamentary time being found for new legislation.
The direction of travel is clear, even if some later dates depend on parliamentary timetables: energy brokerage is moving from a loosely policed corner of the market towards a properly regulated profession, alongside price comparison sites and other third-party intermediaries.
Commission disclosure, and why it matters
Until October 2024, brokers had no legal duty to tell you what they were earning from your contract, and Ofgem's own research suggested most businesses using one had no real idea they were paying for it at all.
From October 2024, that changed. Suppliers must now set out any broker fee in your contract's Principal Terms, and disclose the commission if you ask for it. The impact is real: commission is commonly a few pence added to every kWh, which sounds trivial until you multiply it across your usage. For a business using 30,000 kWh a year, even a modest uplift can add several hundred pounds a year, money you are now entitled to see and question.
If you are currently working with a broker, or thinking about it, asking for that figure in writing is one of the simplest ways to put the new rules to use.
Where the rules are heading next
After 2026, the direction is towards full registration. Ofgem is expected to consult on detailed proposals in 2027, after which existing brokers will likely get a 12-to-18-month sunrise period to register once legislation passes. From that point, trading as an energy broker without Ofgem's authorisation is expected to become illegal, with full enforcement pencilled in for around 2028.
None of this means brokers are the problem. Most operate honestly and save their clients real money. Ofgem's stated aim is to protect the good actors in the market and hold the minority causing harm to account, not to push brokers out altogether.
Broker vs Switch Direct: A Side-by-Side Comparison
Put plainly, here is how the two routes stack up against each other.
Factor | Using a Broker | Switching Direct |
|---|---|---|
Market coverage | Quotes from multiple suppliers in one exercise | Only the supplier(s) you approach yourself |
Time required | Broker does most of the legwork | You request and compare quotes yourself |
Cost | Commission built into your unit rate (disclosable on request) | No broker fee, but you may miss a cheaper deal elsewhere |
Best suited to | Multi-site businesses, complex contracts, limited time | Single-site businesses with simple, predictable usage |
Contract control | Broker negotiates; you approve before signing | You negotiate and sign directly |
Ongoing support | Broker can help with renewals and queries | You deal with the supplier's account team yourself |
If things go wrong | Energy Ombudsman or the Utilities Intermediaries Association | Energy Ombudsman via the supplier directly |
A quick-reference comparison. Neither route wins on every factor, which is exactly why it is worth matching the choice to your business rather than a general rule of thumb.
Neither column is automatically right. The best fit depends on how much time you have, how many meters or sites you are juggling, and how confident you feel comparing suppliers' small print yourself.
How This Affects Your Business Electricity Rates (and Gas Bill)
Business electricity rates in 2026: what to expect
Indicative fixed-contract ranges reported across the UK market, August 2026, excluding VAT. Your postcode, meter type and contract length will move the exact number.
As the chart shows, smaller businesses tend to pay more per kWh than larger ones, mostly because standing charges and supplier overheads are spread across less usage. Layer in gas costs and standing charges on both fuels, and the fuller picture looks like this:
Business size | Electricity (p/kWh) | Elec. standing charge (p/day) | Gas (p/kWh) | Gas standing charge (p/day) |
|---|---|---|---|---|
Micro (under 5,000 kWh/yr) | 28-32p | 50-65p | 8-10p | 25-40p |
Small (5,000-15,000 kWh/yr) | 26-30p | 50-60p | 7-9p | 30-45p |
Medium (15,000-50,000 kWh/yr) | 24-28p | 55-70p | 6.5-8p | 35-50p |
Large (50,000+ kWh/yr) | 19-25p | 100-150p | 6-7.5p | 45-125p |
Indicative ranges compiled from UK market data published in August 2026, excluding VAT and the Climate Change Levy. Treat this as a planning guide and confirm the real number with a live quote.
Two things worth flagging. There is no Ofgem price cap under any of this: the cap you hear about on the news applies only to domestic customers on standard variable tariffs, while business electricity rates and business gas prices are set by wholesale market conditions, your credit profile and how well you negotiate. These figures also assume a fixed contract. Fall onto a deemed or out-of-contract rate, the default you are placed on if you do nothing when your contract ends, and expect to pay noticeably more, sometimes 30% or higher than a negotiated deal. Ofgem limits how punishing these default rates can be, under a rule known as SLC 7.3, but "not unduly onerous" is a long way from a genuine cap.
UK natural gas price trends and your business gas bill
Business gas prices track the wholesale UK natural gas price, driven by global supply, storage levels and how cold the winter looks. Wholesale gas has settled well below the 2022 highs, but it still moves with the seasons: winter delivery typically prices in higher than the following summer, which is why energy buyers, whether a broker or your own finance team, tend to fix contracts ahead of the colder months rather than waiting.
If your business relies on gas for heating, cooking or an industrial process, the same logic applies: comparing your options before your current deal ends, and fixing a rate you are comfortable with, matters more than trying to time the market perfectly.
Broker or Direct in Practice: Two Examples
Example 1: A multi-site business using a broker
Picture a five-site coffee chain with contracts ending across three different suppliers at different points in the year. Chasing three renewal dates and three sets of paperwork alongside running the business is a lot to manage. A broker working from a single Letter of Authority can pull consumption data for all three meters, request fresh quotes across the market, and line the contracts up to end on the same date, so future renewals become one conversation instead of three.
The trade-off is straightforward. The business pays for that convenience through the commission built into each unit rate. Now that disclosure is mandatory, asking the broker to show that figure before signing is a reasonable, and easy, thing to do.
Example 2: A single site switching direct
Now picture an independent design studio using around 8,000 kWh a year. The owner has half an hour to spare, last year's bill to hand, and no appetite for a sales call. Going straight to a supplier, checking the published rate for Octopus electricity against their postcode and meter type, and signing up online can be quicker than waiting for a broker call-back, with no commission baked into the rate either, because no third party is involved.
The trade-off here is coverage. The owner only sees what that one supplier is offering, rather than comparing it against the rest of the market in one go.
Actionable Tips for Choosing the Right Route in 2026
Whichever way you are leaning, a few habits make the decision easier and the outcome cheaper.
Ask for the commission figure in writing. Since October 2024, you are entitled to know what a broker earns from your contract, so ask before you sign, not after.
Get the Letter of Authority's scope in writing. It should state clearly what the broker can and cannot do: gathering information and negotiating, not signing you into a deal without sign-off.
Start comparing three to six months before renewal. Whichever route you choose, starting early keeps you off an expensive deemed or out-of-contract rate.
Check both routes for the same usage. Even if a broker's quote looks good, it costs nothing to check a supplier's own published rate, or another UK energy services provider, for comparison.
Read the exit terms, not just the headline rate. Notice periods, exit fees and what happens to the non-energy portion of your price all vary, and are easy to overlook when you are focused on the unit rate.
Keep a paper trail of every quote and call. Ofgem's expanded rules mean more businesses now have access to the Energy Ombudsman or the Utilities Intermediaries Association if a broker relationship goes wrong, but you will need your records to make a case.
Ask any broker about registration as the rules land. Once Ofgem's registration regime is up and running, working with a broker who is registered, and later authorised, is one more sign they are operating within the rules.
Frequently Asked Questions
Do Ofgem's new rules mean I have to use a broker?
No. The reforms do not require you to use a broker, and they do not rule out switching direct either. They aim to make broker fees visible and hold brokers to clear conduct standards, so whichever route you choose, you can make a more informed decision.
Does the Ofgem price cap protect my business electricity rates?
No. The price cap only applies to domestic customers on standard variable tariffs. Business electricity rates and business gas prices are not capped, which is exactly why comparing before you renew, and locking in a rate you are comfortable with, matters so much for commercial customers.
How do I know if my business counts as a microbusiness?
Broadly, if you have fewer than 10 employees and turnover under roughly £2 million, or you use less than 100,000 kWh of electricity or 293,000 kWh of gas a year, you likely qualify. This regulatory definition is wider than the "micro" usage band on a pricing table, so check even if your business feels bigger than the word suggests.
What happens if I do nothing when my contract ends?
You will usually be moved onto a deemed or out-of-contract rate, the supplier's default tariff, which typically sits well above a negotiated fixed deal. There is no price cap to stop this from being expensive, so it is worth diarising your renewal date well ahead of time.
Can a broker sign me into a contract without my agreement?
No. A Letter of Authority allows a broker to gather information and negotiate on your behalf, but it does not give them the right to commit you to a contract without your explicit consent.
Is switching direct to a supplier like Octopus electricity always cheaper than using a broker?
Not always. Going direct removes any broker commission from the equation, but a broker checking your usage across the whole market, including suppliers you might not think to call yourself, can sometimes land a lower all-in price even after their fee. Comparing both routes against your specific meter is the only way to know for certain.
How long does switching business electricity supplier actually take?
Once your notice period has been served, switching typically takes a few working days for smaller, straightforward accounts and a few weeks for larger or multi-site businesses. Your supply is not interrupted during the process, whichever route you use.
Final Words
Ofgem's reforms will not finish landing this year, and probably not next year either, but the direction is clear: energy brokers are moving from a loosely policed corner of the market towards a properly regulated profession, with commission disclosure, conduct standards and eventually registration all part of the picture. That is good news whichever route you prefer: a broker relationship you can actually see the terms of, or a direct switch you can compare against a wider market with more confidence than before.
What has not changed is the basic maths. Business electricity rates and the UK natural gas price still move with the wholesale market; there is still no Ofgem cap to catch you if a contract lapses, and comparing properly, whether that is through a broker, direct with a supplier, or a bit of both, remains the single biggest lever on your bill.
If chasing quotes from half a dozen suppliers is not how you want to spend your afternoon, SwitchUrEnergy compares live business electricity and gas rates from trusted UK energy services providers in minutes, at no cost to you. Get a free quote today and see what your business could be paying instead.