Households across Britain are bracing for yet another change to their energy bills, after Ofgem announced new rules requiring all suppliers to offer at least one tariff with a lower standing charge by January 2025.
The standing charge is the fixed daily fee that customers pay regardless of how much gas or electricity they use. For many people, particularly single occupants or pensioners, these charges can add up to hundreds of pounds a year before even switching on the heating.
From October, standing charges are already set to climb again — with gas up by 14% and electricity by 4%. Currently, the average household pays 53p per day for electricity and 34p for gas, though in some regions the daily cost is far higher.
Who Benefits from the Change?
Ofgem’s move is designed to give low-usage households more flexibility. For example, people living alone or those who are very careful with their energy use could save money by choosing a tariff with reduced or even zero standing charges.
However, there’s a catch. Energy suppliers will be allowed to increase the unit rate (the cost per kWh of gas or electricity) to compensate. That means while low users may benefit, households with average or high energy consumption could end up paying more overall.
Critics Call It a “Cost Shuffle”
Tim Jarvis, Ofgem’s director general of markets, admitted that these changes “cannot remove costs, only move them around.” Consumer groups have also expressed frustration. The End Fuel Poverty Coalition highlighted that prepayment customers, who often build up debt just from standing charges, are still being left behind.
Energy UK, which represents suppliers, also questioned whether the changes justify the expense of rolling them out, since Ofgem itself has said the reform is only temporary while it reviews how Britain funds its energy network long-term.
What Happens Next?
The new tariffs will become available by late January 2025, covering England, Scotland, and Wales. Every customer, regardless of payment method, will have the option to switch. But experts are warning consumers to carefully check the terms, as savings depend heavily on household usage.
For millions already struggling with the cost-of-living crisis, the announcement feels more like a stopgap than a solution. With the energy price cap rising 2% in October, the pressure on household budgets remains intense.
The big question now is: will this change truly help vulnerable households, or is it just another reshuffle of costs that leaves families paying more?
