Money expert Martin Lewis has issued a warning over a ‘nasty’ charge being added to gas and electricity bills this summer.
Customers at major energy firms like British Gas, EDF and EON have today been told that Ofgem is handing down a new, reduced price cap which takes effect from July 1.
The new cap will save the average household about £122 per year on their bills, but there’s a nasty downside despite much campaigning from Martin Lewis.
The money guru took to social media to explain the ‘much despised’ issue.
He said: “The much despised standing charge is unchanged. So you’ll continue to pay around 90p a day just for the facility of having gas and electricity even if you don’t use it. And that’s particularly nasty in the summer period.
“Because there are many households especially with older people in who only use their gas for central heating, and that’s turned off during the summer but they’re still having to pay 30p a day standing charge just for the facility of having gas.
“Now I’ve long complained and campaigned to bring the standing charge down and bring some of the fixed cost to the unit rate. That has not been done yet.
“I know many people hate the standing charge. It is a moral hazard. It means the people at the lower end don’t get as much reduction when they cut their usage to cut their bills.
“It also means in July that people who get the biggest benefit are the higher users because they get a bigger gain of the unit rate dropping.
“But that’s the way it works, I’ve spoken to Rachel Reeves about it, I’ve spoken to Ofgem many times, and we are due a consultation report on the standing charge this summer. My fingers are crossed they’ll bring it down.
“But there is a problem that it takes government to protect vulnerable high users, and Ofgem may not bring the standing charge down because it doesn’t have the power to protect those vulnerable high users.”
Martin added that the new prediction is for bills to increase again from October so this price cut is ‘the last we’ll see for a while’.