Standing charge and low income

hedgewitch_2

I recently spoke to Swalec to see if I could get my monthly direct debit reduced and the very helpful lady gave me two ways to reduce my costs.

Firstly, standing charges are optional, I had no idea that was so. If you do away with the s.c., the first few units cost more and the rest cost less, so if you use a lot of electricity you gain enormously.

Secondly, if more than 10% of your household income goes on fuel costs, you can have a 20% reduction in your fuel bill.

I wasn't aware of either of these things, I have been with Swalec for years and they never informed me until now, so I could have been having these savings for ages, talk about burning money!

Net result: my monthly payment reduced by 53%.:j

HappyMJ

The standing charge however you pay it makes little difference. With Npower it's the first 2kWh per day at a higher rate and the difference between the primary rate and the secondary rate equals the standing charge. You don't save anything if you use more than 2kWh per day at the primary rate. That's extremely low usage.

As you say you spend more than 10% of your income on heating fuel I doubt you are a very low user. The minimum income someone is going to have is benefits at £67.50 per week which means you spend more than £30 a month on heating. That's almost 3000kWh per year. That's almost average.

What's the new unit rates that they are charging you? How much are you using? Are you sure there aren't other better/cheaper suppliers out there.

Cardew

hedgewitch wrote: »

Firstly, standing charges are optional, I had no idea that was so. If you do away with the s.c., the first few units cost more and the rest cost less, so if you use a lot of electricity you gain enormously.

:j

In general that is not correct.

The 'Standing Charge' is collected by one of two methods - a daily charge or the tier system (where you pay more for the first units you use - these are termed Tier 1 or primary units.)

For the majority of customers it makes little difference as the extra you pay on the tier system is the same as you would pay with a daily charge.

It is only those who use very little electricity(or gas) who gain by the tier system.

Ben84

The tiered unit cost system can be useful for very low energy consumers (not many of us perhaps?) or people who go away from home for large amounts of time leaving their house empty. I've used it this way to save decent amounts of money in the past.

Of course, in some cases, paying a standing charge works out better if you're a high user as it can result in lower cost of energy per unit and if you're using a lot the savings multiply up.