MILLIONS of households will be able to get “no standing charge” energy tariffs from this winter.
Standing charges are a fixed daily fee added to your bill, but under the new plans these would be included in tariff rates.
Low energy users, those with prepayment meters and those with second homes who don’t use their heating or electricity very often would benefit from the new tariffs.
The energy regulator Ofgem plans to keep the option of having a standing charge, which is good for low-income families in poorly insulated homes or those who rely on medical equipment.
Charlotte Friel, from Ofgem, said: “We’re looking closely at how these tariffs will work in practice, but everyone will need to carefully consider which option best suits their needs.
“The costs included in the standing charge ultimately have to be paid. But while they may not save everyone money, they will give people a choice, and greater control over their bills.”
It first announced the shake-up to energy rules in December last year but today it confirmed firms will have to offer the tariffs to customers in time for winter.
It also announced a consultation on how the new tariffs would work.
Martin Lewis said the plans were “progress”.
He added: “Standing charges are by far the most complained-about part of an energy bill.
“They’re a moral hazard that disincentivises lower users from cutting their bills, and leaves many older people, who only use gas for heating in the winter, still paying for it every day in summer.”
However, he pointed out that there is a “big hole” under the current plan as customers will have to opt in.
[bc_video account_id=”5067014667001″ application_id=”” aspect_ratio=”16:9″ autoplay=”” caption=”How to take a meter reading” embed=”in-page” experience_id=”” height=”100%” language_detection=”” max_height=”360px” max_width=”640px” min_width=”0px” mute=”” padding_top=”56%” picture_in_picture=”” player_id=”default” playlist_id=”” playsinline=”” sizing=”responsive” video_id=”6353373554112″ video_ids=”” width=”640px”]Richard Neudegg from Uswitch.com welcomed the change but said “the devil will be in the detail”.
He added: “Consumers can take action now to reduce what they pay for their energy.
[authenticated-scripts src=”%3Cscript%20class%3D%22palin-poll%22%20src%3D%22https%3A%2F%2Fwww.thesun.co.uk%2Fpollingwidgets%2Fv3%2Fwidget.js%3Fquestion_id%3D107171%26game%3Dpolling%22%3E%3C%2Fscript%3E” type=”embedded” width=”100″ /]“There are a range of fixed deals on the market, which can help households beat the January cap and the predicted price rise in April, and often come with lower standing charges than the cap.”
Energy bills set to rise in April
Energy bills are set to rise by £85 a year in April for 26million households, according to consultancy Cornwall Insight.
The forecaster, which is widely regarded for its accurate predictions, said an average household will pay £1,823 a year.
The increase is partly due to colder weather and reduced renewable production, which means gas storage levels across Europe have fallen, causing wholesale prices to rise.
The rise will come at the same time as increases to water and council tax bills.
However, minimum wage levels, benefits and state pension amounts will also go up at the same time.
Cornwall added that bills could fall later in the year before rising again before the winter.
Earlier this week British Gas announced an extension to its support scheme for struggling customers.
The initiative, which first launched in June 2024, matches customers’ energy debt repayments to help customers pay off bills.
While millions of households are being urged to check if they can get cost of living vouchers from their local council under the Household Support Fund.