As the weather gets colder and we all start wearing extra layers, our utility bills unfortunately start to rise. With snow scheduled for the UK and high cost of living to deal with in the run-up to Christmas, customers of certain energy suppliers have been issued a warning. Even if you aren’t using gas or electricity, you could still be charged £300 a year.
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This is because of standing charges, which are applied by most suppliers in the UK. Although the costs are small when looked at on a daily level, they really add up over the course of 12 months - especially for those who are already struggling. Here’s which companies apply them, and why several campaigners are urging suppliers to rethink this system.
Which companies apply standing charges
Standing charges currently cost the average household 53p a day for electricity and 30p a day for gas. This adds £303 to your bills over the course of a year - regardless of how much energy you use.
Currently, British Gas, OVO, E.On and Octopus customers are being charged this daily sum. The charges even apply to properties that are empty. They exist to cover the costs that the supplier puts in to get the energy to your house. According to comparethemarket.com, this includes:
- 'Using and maintaining the energy networks, wires and pipes that carry gas and electricity across the country to your home
- Keeping your home connected to the energy network
- Carrying out meter readings
- Payments towards government initiatives that help vulnerable households and reduce CO2 emissions'
Utilita Energy is one of the only energy suppliers that do not charge this fee.
Who is campaigning against these charges?
The money expert Martin Lewis has long-campaigned against these charges, calling them a ‘moral hazard’. He praised Ofgem recently as the company announced they would be reviewing this system.
Outrageously, most people will pay £300 a year just for the facility of having gas and electricity, even if they don't use any.
This is a terrible, unnecessary situation for the most vulnerable.
Peter Smith is part of National Energy Action, a charity that helps fight against fuel poverty. Smith has asked:
How can it be right that someone who can’t afford any energy for their home, still pays a daily charge that is the same or more than someone in a mansion?
However, as always, there is some dispute between those protecting the most vulnerable and those protecting their business. Ofgem’s director for markets Tim Jarvis has said that ‘there is a difficult balance to be struck’.
If you are struggling with covering costs as prices remain high, note that 2024’s payment date for the cost of living payment has been announced. You can also check out these tips from Lewis to help save £100s on your energy bills this winter.
Birmingham Live: £300 warning issued to British Gas, OVO, E.On and Octopus customers - over using no gas or electricity
Compare the Market: Guide to energy standing charges