[Andy65]

I've always opposed standing charges ever since they were introduced as they have a negative impact on lower users. I've just read this:

https://www.bbc.co.uk/news/articles/c3vwxyq33k0o

Talk about poor journalism (I used to expect better from the BBC but now they just repeat anything without question), why wouldn't you explain why the standing charges are so high - such as funding the debacle of smart meters, OFGEMs failures with validating energy suppliers etc.

I pay more in standing charges than I do in actual energy use. The argument that the new proposals will be too complex is nonsense, but OFGEM will fall for it as they did before when they restricted the number of tariffs that could be offered. The end result was that the good tariffs disappeared and the suppliers essentially offered the same tariffs. Whatever the outcome I doubt it will benefit the consumer.

[meldrewreborn]

@Andy65

I think tariffs have normally included standing charges. I do remember a time when suppliers sometimes offered no standing charge option, which a higher unit rate for the first units to be consumed and then the normal rate thereafter.
the high rate for the initial units exactly covered the forgone standing charge so most users ended up paying exactly the same, whichever option they went for!!!! I can remember when the BT phone bill had the same structure, so much for line rental, then charges for calls when we got a phone in our first home in 1977!

I think the main objection to the standing charge is that costs relating to green incentives, social discounts ( like warm homes scheme) and similar are lumped in, and all consumers pay them equally- it’s like flat tax which is seen as being regressive - it affects lower income households the greatest.

Now the government could take those costs into general taxation, but then they’d have to increase taxes to meet the cost. Governments like lumping costs onto suppliers like the warm home discount, because the government takes the credit but doesn’t have to administer or fund it.!! They’re not totally stupid you know,

As a low user of electricity myself, a zero standing charge tariff would be to my advantage, especially on electricity, which of course has the most bits added in because virtually all household have electricity, many fewer have gas, and so the costs are spread as widely as possible.

I’m certain that the vast majority of households don’t actively switch suppliers regularly or tariffs. I used to switch whenever my fixed deal was running out but since the energy crisis and the price cap being all important, competition has diminished. I still switch tariffs when I feel it beneficial though. The lack of preparedness to switch is the elephant in the room, even if lower standing charge tariffs were available would customers switch to them?

when there were smaller suppliers in the market, they were sometimes excluded from the need to support the social programmes which meant they offered lower prices. That probably isn’t permissible now.

[Andy65]

@meldrewreborn

I suspect my age may be playing a part when it comes to standing charges then, my spreadsheet only goes back to 2012 and it had standing charges then. I thought that there was a time when I didn't pay them.

I know more than a few people who just go with the flow, they don't analyse their usage or work out what is the best tariff.

There seems to be a consensus that it's overly complicated, so many don't bother. It's simple maths isn't it?

[meldrewreborn]

@Andy65

It’s simple if you are that way inclined. I’ve often commented that financial literacy in this country is generally poor, but whether it’s worse than in other nations I’m not certain. But the fact that relatively few switch says a lot.

I’d make the Martin Lewis show compulsory viewing if I was PM!