Ofgem Plans Lower Standing Charges Amid Criticism Bill Savings Unlikely UK

Ofgem has introduced a new plan requiring energy suppliers to offer at least one tariff with a lower standing charge, allowing consumers to pay these fixed costs as part of their per-unit energy rate. However, this change is criticized for simply shifting costs around the bill rather than reducing overall bills, with experts like Martin Lewis calling the plan "disappointing" and warning it may lead to higher per-unit rates without meaningful relief for low-use households. Standing charges, which have risen significantly since 2019, disproportionately burden low-energy users, such as vulnerable and older people, effectively penalizing them while subsidizing high-use households. Critics argue that a fairer system would band households by their energy usage or means, similar to income or council tax models, rather than maintaining a flat-rate fee. Ofgem acknowledges the need for consumer choice but insists that these changes cannot remove standing charges entirely and may not lower bills on their own. Overall, there is widespread concern that the reforms will cause confusion and fail to alleviate the financial pressures on consumers facing high energy costs.