- The standing charge is a fixed daily fee applied to energy bills. It covers the cost of maintaining the infrastructure and providing services, regardless of whether you use these services are not. See our explainer here https://www.nea.org.uk/standing-charge/
- Despite the energy price cap decreasing from 1 October, standing charges are going up.
- This hits low-usage households proportionally more. Low-usage households are often low income and in fuel poverty.
- Prepayment meter and standard credit (pay on receipt of bill) customers pay a higher standing charge than direct debit customers.
- Certain parts of the country pay a higher standing charge, due to higher energy infrastructure costs to get energy there. People in North Wales or Merseyside will be paying over £80 more a year than Londoners.
National Energy Action’s director of policy, Peter Smith says: “In common with millions of households across Great Britain, National Energy Action (NEA) is hugely alarmed by the extent of increases to standing charges. Come October, these charges will have soared by an average of more than 65% in four and half years. This is putting a terrible strain on many households in the middle of the worst drop in living standards in recent memory and an on-going energy crisis.
“Beyond the overall increase, we know that where you live and how you pay for your energy also has a huge impact. People in North Wales or Merseyside will be paying over £80 more a year than Londoners – that’s a third more. People who pay for their energy via a prepayment meter have been clobbered with much bigger increases of almost 80% over the same period.
“Much of the rise has been to pay for the cost of transferring the customers of failed energy suppliers to new suppliers, and is a conscious decision from Ofgem on how to pay for energy networks. The impact of high standing charges is particularly damaging for low-usage households, who pay the same as those on the highest incomes who may have massive homes, heated swimming pools or several electric vehicles. These charges are now unaffordable for those on the lowest incomes and build up daily, even for people can’t afford to use any energy. It just isn’t fair.
“We want to see the UK Government and Ofgem introduce a far fairer approach. Either by reflecting a customer’s usage when recovering some of these charges or by considering a customer’s payment method, which fuels they use or their ability to pay.”