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Energy Bills: New Tariffs Offer Hope for Low Users
28 Feb
Summary
- Energy regulator Ofgem is piloting low or no standing charge tariffs from April.
- Four suppliers, including British Gas and EDF, will offer the trial tariffs.
- Low-usage homes could save around £150 annually under the new tariffs.
Starting in April, energy regulator Ofgem is initiating a 12-month pilot program featuring low or no standing charge tariffs. Four major suppliers—British Gas, EDF, Eon, and Octopus—will offer these trial tariffs to an estimated 150,000 eligible households. The pilot seeks to provide more choice, particularly for consumers with low energy usage.
Under the current energy price cap, daily standing charges are set at 57.21p for electricity and 29.09p for gas, totaling approximately £315 annually for a dual-fuel household. Early projections suggest that households with low energy consumption could save around £150 per year through these new tariff structures. Some suppliers, like Eon Next, require participants to have a smart meter and pay via direct debit.
However, experts caution that these tariffs may not benefit everyone. Suppliers are expected to charge higher unit rates for energy, meaning actual savings will depend heavily on an individual's total energy consumption and the specific rates offered. It is advised that households do not postpone decisions on managing their energy bills in anticipation of these new tariffs, especially during peak winter usage.
Previous trials by Eon Next in 2024 indicated that a majority of participants (64%) had higher energy usage and might have saved more on standard tariffs with higher standing charges. Consumers are urged to compare all available options, including fixed deals, factoring in any exit fees from current contracts, to determine the most cost-effective choice for their specific needs.
