Parents could save up to £540 a year by switching from premium baby milk formula to a basic brand, a regulator has said following a probe into the market.

Parents can feel guilty about using lower-priced brands, because they think they are somehow inferior, the Competition & Markets Authority (CMA) said.

But lower-priced formulas have the same nutritional value as the more expensive options, it said.

The regulator has also recommended that formula should have plain packaging in hospitals, and parents should be allowed to buy baby milk in supermarkets using loyalty points and vouchers.

The CMA compared various brands of formula, and found that the difference in prices over the first year of a baby’s life “has a sizeable financial impact on parents”.

Buying current market leader, Aptamil, rather than Little Steps, which is one of the cheapest formulas, would cost parents £300 more per year.

Buying the Aptamil premium brand, Aptamil Advanced, rather than Little Steps would cost £540 more.

At present parents are facing “poor outcomes” because of the way the baby milk market works, the CMA said.

Baby milk brands often provide hospitals with formula below cost, because once parents start using a brand, they tend to stick with it.

But formula milks are tightly controlled by law, and must provide essential nutrients for babies, and be safe.

Standardised packaging would “eliminate” brand influence after parents leave hospitals, the regulator said.

The regulator also recommended that supermarkets should let people know that all infant formula has the right nutrients for babies, and that information should also be on baby milk labels.

Retailers should also make it easier for parents to compare prices, and the ban on advertising should be extended to include follow-on formula.

Restrictions on price promotions and discounts on formula should remain in place so mothers are not discouraged from breastfeeding, it said.

But people should be allowed to use points, gift cards and vouchers to get the most for their money, its chief executive told the BBC.