{"id":10725,"date":"2024-12-12T12:45:56","date_gmt":"2024-12-12T12:45:56","guid":{"rendered":"https:\/\/en.econostrum.info\/?p=10725"},"modified":"2024-12-12T12:45:56","modified_gmt":"2024-12-12T12:45:56","slug":"why-standing-charges-are-raising-energy-bills","status":"publish","type":"post","link":"https:\/\/en.econostrum.info\/why-standing-charges-are-raising-energy-bills\/","title":{"rendered":"Why Standing Charges Are Raising Your Energy Bills and How to Avoid Them"},"content":{"rendered":"<div class=\"flex max-w-full flex-col flex-grow\">\n<div class=\"min-h-8 text-message flex w-full flex-col items-end gap-2 whitespace-normal break-words text-start [.text-message+&amp;]:mt-5\" dir=\"auto\" data-message-author-role=\"assistant\" data-message-id=\"cdfa984f-5319-4b83-afd9-0604f4ffbd69\" data-message-model-slug=\"gpt-4o-mini\">\n<div class=\"flex w-full flex-col gap-1 empty:hidden first:pt-[3px]\">\n<div class=\"markdown prose w-full break-words dark:prose-invert dark\">\n<p>Energy bills are a key concern in 2024, with <strong>standing charges<\/strong>, <strong>fixed charges<\/strong>, <strong>taxes<\/strong>, and debates over<strong> fairness<\/strong>. <strong>Vulnerable households<\/strong>, especially those with <strong>low usage<\/strong>, face disproportionate impacts. Martin Lewis, a trusted <strong>financial expert<\/strong>, highlights deeper <strong>flaws<\/strong> in the system, questioning if current <strong>pricing structures<\/strong> serve consumers effectively. His insights expose the hidden <strong>dynamics<\/strong> of an industry that increasingly burdens those least able to pay.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2>The Impact of Taxes on Energy Bills<\/h2>\n<p><strong>Martin Lewis<\/strong> emphasizes that <strong>energy taxes<\/strong>, particularly <strong>consumption taxes<\/strong>, contribute substantially to rising energy costs. If these taxes are not adjusted or reduced, households could face even higher bills. He has described <strong>standing charges<\/strong> as a \u201c<strong>\u00a3388-a-year poll tax<\/strong> on energy bills,\u201d criticizing their impact on low-energy users. Under <strong>Ofgem&#8217;s price cap<\/strong>, <strong>standing charges<\/strong> have seen a dramatic <strong>43 per cent increase<\/strong> since 2019. These fixed charges are a burden on households that consume less energy, and they have come under increasing scrutiny due to their regressive nature.<\/p>\n<ul>\n<li><strong>\u00a3388-a-year<\/strong> poll tax on energy bills<\/li>\n<li><strong>43% increase<\/strong> in standing charges since 2019 under Ofgem&#8217;s price cap<\/li>\n<li>Households on <strong>standard variable tariffs<\/strong> paying by <strong>direct debit<\/strong> are currently charged <strong>60.99p per day<\/strong> for <strong>electricity<\/strong> and <strong>31.66p<\/strong> for <strong>gas<\/strong>.<\/li>\n<li>These rates will decrease slightly from <strong>January 1<\/strong>, with <strong>electricity standing charges<\/strong> falling to <strong>60.97p daily<\/strong> and <strong>gas<\/strong> to <strong>31.65p<\/strong>.<\/li>\n<\/ul>\n<p>Despite the slight reduction expected in <strong>January<\/strong>, the <strong>standing charges<\/strong> are still <strong>10 per cent below<\/strong> the price cap, leading to frustration among many consumers. <strong>Martin Lewis<\/strong> has argued that these <strong>standing charges<\/strong> disproportionately affect vulnerable groups, particularly those with low energy usage, such as <strong>single-person households<\/strong> or <strong>energy-efficient homes<\/strong>.<\/p>\n<h2>The Balance Between Energy Tariff Regulation and Market Freedom<\/h2>\n<p>Although <strong>energy tariffs<\/strong> are regulated, they can still fluctuate due to <strong>supply<\/strong> and <strong>demand<\/strong>. <strong>Lewis<\/strong> advises consumers to compare tariffs and avoid accepting <strong>automatic increases<\/strong> when contracts expire, urging them to find better deals. While <strong>Ofgem&#8217;s price cap<\/strong> aims to keep <strong>energy prices<\/strong> within reasonable bounds, it doesn&#8217;t directly tackle the fairness of <strong>standing charges<\/strong>.<\/p>\n<ul>\n<li><strong>Compare offers <\/strong>: Avoid default tariffs at the end of a contract.<\/li>\n<li><strong>Market fluctuations <\/strong>: Prices depend on <strong>supply<\/strong> and <strong>demand<\/strong>, making it important to shop around for the best deal.<\/li>\n<\/ul>\n<p>Consumers need to stay proactive in finding the best deals, as <strong>tariff changes<\/strong> can significantly impact household budgets.<\/p>\n<h2>Practical Tips to Lower Bills<\/h2>\n<p><strong>Lewis<\/strong> offers several practical strategies for reducing <strong>energy consumption<\/strong> and lowering bills. Key suggestions include using <strong>energy-efficient appliances<\/strong>, installing <strong>smart thermostats<\/strong>, and improving <strong>home insulation<\/strong>. By managing their consumption better, households can mitigate some financial pressure created by rising <strong>energy prices<\/strong>.<\/p>\n<ul>\n<li><strong>Optimise consumption <\/strong>: Choose <strong>energy-efficient appliances<\/strong> and manage heating.<\/li>\n<li><strong>Invest in energy-saving measures <\/strong>: Upgrade <strong>insulation<\/strong> and use <strong>smart controls<\/strong>.<\/li>\n<\/ul>\n<p>These tips aim to help reduce overall <strong>energy consumption<\/strong>, which can ultimately result in lower monthly bills. However, the effectiveness of these measures is limited if the structure of <strong>energy tariffs<\/strong>, particularly <strong>standing charges<\/strong>, remains unfairly regressive.<\/p>\n<h2>The Role of Government and Financial Aid<\/h2>\n<p><strong>Lewis<\/strong> stresses the importance of <strong>government intervention<\/strong>, particularly <strong>financial aid<\/strong> and targeted <strong>tax reductions<\/strong>, to help vulnerable households cope with rising energy costs. These measures must be more accessible and better distributed. Programs like the <strong>Warm Home Discount<\/strong> provide essential support to qualifying households, offering <strong>rebates<\/strong> on <strong>energy bills<\/strong>. This program is vital for vulnerable consumers, especially during periods of high energy prices.<\/p>\n<ul>\n<li><strong>Warm Home Discount<\/strong>: A financial <strong>rebate<\/strong> to help reduce <strong>energy bills<\/strong>.<\/li>\n<li><strong>Targeted support<\/strong>: Aimed at assisting <strong>low-income households<\/strong> with high <strong>energy costs<\/strong>.<\/li>\n<\/ul>\n<p>The <strong>Warm Home Discount<\/strong> helps millions of low-income households by providing a <strong>\u00a3150 rebate<\/strong> on <strong>energy bills<\/strong>, offering crucial financial relief during colder months.<\/p>\n<h2>Energy Firms to Offer Tariffs Without Standing Charges<\/h2>\n<p>To address growing consumer frustration, <strong>energy firms<\/strong> will soon be required to offer tariffs without <strong>standing charges<\/strong>, alongside existing plans. This change, expected to take effect by next winter, is designed to provide more choice and reduce <strong>energy debt<\/strong>. <strong>Tim Jarvis<\/strong>, Director General of Markets at <a href=\"https:\/\/www.ofgem.gov.uk\/about-us\/our-structure-and-leadership\/gema-and-senior-executive-committee-members\" target=\"_blank\" rel=\"noopener\"><strong>Ofgem<\/strong><\/a>, said:<\/p>\n<blockquote><p>&#8220;Many people feel very strongly that standing charges are unfair and prevent them from being able to manage their bills effectively.&#8221; <strong>Tim Jarvis.<\/strong><\/p><\/blockquote>\n<p>By eliminating <strong>standing charges<\/strong>, <strong>Ofgem<\/strong> aims to give consumers more flexibility, particularly those with lower energy usage. When combined with programs like the <a href=\"https:\/\/en.econostrum.info\/households-eligible-warm-discount-energy-bills\/\" target=\"_blank\" rel=\"noopener\">Warm Home Discount<\/a>, these changes could significantly assist <strong>vulnerable households<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Martin Lewis <strong>criticizes<\/strong> the \u00a3338 <strong>fixed charges<\/strong> on <strong>energy bills<\/strong>, calling them an &#8220;<strong>unfair tax<\/strong>&#8221; that disproportionately affects <strong>vulnerable households<\/strong>, such as <strong>elderly people<\/strong> with <strong>low energy usage<\/strong>.<\/p>\n","protected":false},"author":9,"featured_media":10736,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[39],"tags":[],"class_list":["post-10725","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33","no-featured-image-padding"],"_links":{"self":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts\/10725","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/comments?post=10725"}],"version-history":[{"count":0,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/posts\/10725\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/media\/10736"}],"wp:attachment":[{"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/media?parent=10725"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/categories?post=10725"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.econostrum.info\/wp-json\/wp\/v2\/tags?post=10725"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}