4 days Ago By [email protected] (James Rodger, Ben Lyons)
Martin Lewis has warned customers about the potential issues with zero standing charge tariffs that have been introduced following changes in Ofgem regulations. The consumer champion and television personality expressed his concerns after Ofgem, the energy regulator, unveiled these tariffs last week. Speaking on the matter, Money Saving Expert Martin said: "This isn't the perfect solution that I would have liked to happen but I think it's the best solution that Ofgem can do unilaterally without government intervention.
" He highlighted the impact on major suppliers such as British Gas, EDF, Ovo, Octopus, and Eon, saying: "£338 a year is the average standing charge on Direct Debit. You pay that whether you use anything or nothing. It's a disincentive for those who have lower bills to cut their use any more.
It's terrible for people who only use their gas central heating in the winter, which is many elderly people. Because it means they're paying all the way through the summer for gas central heating." He added: "They're paying every day even though they don't use it.
It's awful for people on pre-payment tariffs. IT means when they've got no money and they're not using any energy, the meter's still ticking. So when they want to use energy again, they have to put money in to cover the standing charges.
Even though they don't have the money. So I've long campaigned for change." Martin Lewis, the founder of MoneySavingExpert.
com, has shed light on why the Energy Price Cap's lower standing charges haven't been introduced despite the benefit it would have for many households. Speaking candidly, he said: "Here's the problem. And here's why what I would really like to see which is lower standing charges on the Energy Price Cap that dictates the price 80% of homes in England, Scotland and Wales pay hasn't happened.
Many charities who represent people with disabilities and illnesses which have to have high energy usage didn't want the standing charge to be lowered, understandably. I'm not having a go at them.", reports Birmingham Live .
He explained the situation further, acknowledging the concerns from charities representing people with high energy needs due to disabilities or illnesses: "Here's the problem. And here's why what I would really like to see which is lower standing charges on the Energy Price Cap that dictates the price 80% of homes in England, Scotland and Wales pay hasn't happened. Many charities who represent people with disabilities and illnesses which have to have high energy usage didn't want the standing charge to be lowered, understandably.
I'm not having a go at them." Martin detailed the potential consequences for vulnerable consumers: "Because if you've got an electric wheelchair for your child or a dialysis machine or something that means you have very high energy usage, if you lower the standing charge, where does the cost go to? It goes onto the unit rate, the amount that you pay for each unit of gas and electricity. So vulnerable higher users would suffer from this.
" He went on to say that while he’s often critical of Ofgem, in this instance, they faced a complex issue: "The regulator to be fair to it, and I've kicked Ofgem many times in the past when I think it needs it but I'm not doing it this time, the regulator felt and I thought that what was going to happen, that it couldn't lower the main standing charge because of the impact on those vulnerable people, what we needed is the government to work in concert with the regulator for that to happen." However, he noted the government has yet to provide aid for those high-usage vulnerable households: "And the government hasn't announced support for those vulnerable high users. I think there's a chance it may do it next year and this could change again but it hasn't happened yet.
" Urging for a solution that caters to all, Martin concluded: "This is the difficult bit - who chooses? Because the price cap was set up as a safety net tariff if you like for people who don't switch." He went on to say: "What I will be lobbying for is by the time this comes in at the end of next year, is that firms must default people if they're on the Price Cap to the cheapest tariff, or at the very least, firms must default the most vulnerable, those on the priority services register, to the cheapest tariff." He added: "So low users will automatically be put on the new no-standing charge tariff.
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