British Gas customers given £338 after daily | European Markets

British Gasoline clients might slash up to £338 off their vitality payments per 12 months after a every day charge was axed.

Power regulator Ofgem has unveiled plans that may mandate vitality suppliers to offer tariffs with ‘low or no standing charges’, permitting clients to as an alternative pay the prices as half of their unit price as an alternative.

Ofgem is at present consulting on bringing within the option beneath the price cap that might cowl so-called zero standing charge tariffs, with the purpose of making these tariffs obtainable in time for winter this 12 months.

Some vitality suppliers already offer low or no standing charge tariffs, however these aren’t common, so the regulator says more alternative is needed to higher assist clients.

Standing fees are a fixed every day quantity that’s added to vitality payments by suppliers, regardless of how a lot vitality you utilize and so they value the average dual-fuel family £338 per 12 months on average.

However beneath Ofgem’s plans, suppliers shall be made to offer zero standing charge tariffs to households – alongside different tariffs – by this winter, which means British Gasoline clients who switched might make an annual saving of up to £338.

Standing fees are used to cowl the associated fee of supplying vitality to properties and companies, and so they additionally cowl the prices of building new community infrastructure, and protecting the facility on when vitality suppliers go bust.

However campaigners have branded them unfair as everyone pays the identical price, which means they make up a far larger proportion of payments for people who use much less vitality.

Ofgem mentioned tens of hundreds of shoppers responded to its call for enter on standing fees, with many calling for them to be scrapped altogether to make it simpler to handle payments or pay back debt.

However the regulator mentioned it’s important for households to retain a alternative of tariff so it says standing fees received’t be eliminated altogether, as those that use a lot of vitality – typically for medical and health causes – would see their payments rise considerably.

Ofgem as an alternative plans to mandate vitality suppliers to offer zero standing fees tariffs alongside present ones so that customers have the chance to decide on a tariff that best fits them.

Charlotte Friel, director for retail pricing and systems at Ofgem, mentioned: “We know from the huge response we’ve had that many feel standing charges are unfair. However, we also know that vulnerable, high-energy users – including those who rely on medical equipment at home or low-income families in poorly insulated houses – would suffer disproportionately if these costs were added to the unit rate for everyone.

“That’s why we’re moving forward with plans that will give customers a choice and more control over how they choose to pay for their gas and electricity. We’re looking closely at how these tariffs will work in practice, but everyone will need to carefully consider which option best suits their needs.

“The costs included in the standing charge ultimately have to be paid. But while they may not save everyone money, they will give people a choice, and greater control over their bills.”

The session comes after Power Secretary Ed Miliband urged Ofgem to crack down on rising prices, with latest forecasts displaying that the quantity people pays per unit of electrical energy is set to go up again in April – even when most people’s payments will go down as a result of of much less utilization.

Martin Lewis, founder of MoneySavingExpert.com, mentioned: “This is progress. Standing charges are by far the most complained-about part of an energy bill. It costs in excess of £300 a year just to have the facility of gas and electricity, even if you don’t use any.

“They’re a moral hazard that disincentives lower users from cutting their bills, and leaves many older people, who only use gas for heating in the winter, still paying for it every day in summer.”

Lewis mentioned Ofgem ought to transfer susceptible clients who don’t use a lot electrical energy to a “low or no standing charge” tariff by default, utilizing an opt-out mechanism, in order that people don’t miss out on financial savings.