Energy bill review could mean fairer prices for people who use less

Energy regulator Ofgem has launched a major review into how energy bills are worked out. 

And it could lead to a better deal for people who are already struggling.

Right now, even if you’re using as little energy as possible, you still get charged just for being connected. 

That hits low-income households the hardest, especially those on prepayment meters who already pay more.

Here’s what the review means for you.

Why are bills so unfair?

Most people don’t realise that part of your energy bill – the standing charge – is a fixed daily cost, no matter how much you use.

Standing charges are currently around 60p a day for electricity and 31p for gas. That adds up to more than £330 a year, before you’ve even used anything.

So if you live in a small home or you’re cutting back to try and save money, you still end up paying the same as someone in a big house who uses loads more energy. 

That doesn’t feel fair.

What’s Ofgem doing about it?

Ofgem has launched a full review to look at whether the way bills are set needs to change.

They’re asking whether the standing charge should be reduced or scrapped. 

And whether it’s fair that people who use less still pay the same as those who use more.

They’re also looking at whether prepayment customers, who are more likely to be on low incomes, are being let down.

Will this bring my bills down?

Not straight away. 

This is the start of a longer process. 

But it’s a step in the right direction and could lead to fairer energy bills in the future, especially for people on tight budgets.

What can I do now if I’m struggling?

If your energy bills are piling up, or you’re worried about topping up your meter, help is available.

You might be able to:

• get emergency credit if you’re on a prepayment meter
• apply for a grant or hardship fund from your supplier
• join the Priority Services Register for extra support

You can also get in touch with us for help with managing your money or sorting out debt.

We can check you’re getting all the benefits you’re entitled to and help you create a realistic budget.

And if you owe money and are struggling with repayments, we’re here to give you debt advice.