Martin Lewis has issued an update on the £338 a year standing charge every home must pay on their energy bills.
It follows an announcement by regulator Ofgem that energy firms will have to offer household tariffs free of standing charges.
The regulator wants suppliers to have to offer “zero standing charge” tariffs alongside other tariffs by next winter as part of plans to address ballooning household energy debt.
NEWS: @Ofgem announces firms to offer a 'no standing' charge Price Cap as well as the normal one. Here's my official MSE comment on it...
— Martin Lewis (@MartinSLewis) December 12, 2024
"While today's Ofgem announcement on standing charges isn't the best possible outcome, it's the best outcome that Ofgem can deliver…
Martin Lewis responded: "Standing charges are a £338 a year poll tax on energy bills, a moral hazard disincentivising lower users from cutting their bills. They also punish customers that only use gas for central heating in winter, many of whom are elderly, by making them pay for every day in summer. It's by far the biggest single subject of complaint I get from the public about energy bills.
He added: "The best outcome would be to slash standing charges within the Price Cap, yet as that'd mean the cost of each unit of energy needed to increase, it'd require the Government to put in special support for vulnerable high energy users – such as those charging electric wheelchairs, or those with illnesses that require a very warm home. That hasn't happened (yet?).
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"Instead, I'm pleased its alternative path follows our submission suggestion of a dual Price Cap, one as now, a 'higher standing charge, lower unit rate', and a new 'no standing charge, higher unit rate' version that'll benefit lower users.
"Yet the Price Cap was designed to be a safety-net tariff for customers who don't or can't engage in switching."
He has added that he will be making representation to Ofgem to ensure firms are made to default lower-use Price Cap customers on to the no standing charge tariff – or at least do that for those on the Priority Services Register.
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