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Standing Charge 10% Increase
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And the bit in bold is where it all falls apart - it's a false assumption to conflate "worst off" and "lowest users" - often the worst off in society also have the poorest insulated houses, health needs that require higher heating bills etc.coupleuk said:
The same as it should be with Car Tax.matt_drummer said:Why is the standing charge a rip off?
The supplying company gets none of it.
How do you propose to pay for the costs of distributing energy to your home?
Use more energy, pay more per unit/litre.
Those who can least afford the cost are proportionally worse off.
Where is the encouragement to save energy when tied to high standing Charge.
Far easier to cut back and get the benefit when coat is unit based.
It may well not be what you have read - but that doesn't change the fact that it is the truth. Tell you what - have this as a statement: "The Americans were responsible for the start of World War 1" - there you go - you've read it now, so it must be the truth, right?sevenhills said:
That is not what I have read!Scot_39 said:coupleuk said:Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).
These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.
How does that help people reduce their electric bill? - where is the incentive?
Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.
Amazed this website does not fight the issue.Ofgem set the standing charge - not the energy firms - not the government.
The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
If Ofgem set the level of the standing charge, we would all have messages about it's increase.
Sadly media outlets aren't always as upfront and honest as we might like, and tend to skim over the details and make inferences that they know will rile their readership/viewership.
It is Ofgem that have increased the standing charges, and yes, they have also announced it, it's just most people aren't signed up to receive regular updates from Ofgem so won't have seen it. Easiest way to get the info might well be to just check in here regularly - these things are ALWAYS discussed at length! Ofgem set the standing charges - and it is up to the energy suppliers to then pass that message to their customers - exactly as Octopus have for the OP (and indeed, for me).
As a point of interest by the way - it really is unreasonable to be bashing Octopus for this - their SC's are a little lower per fuel than those set by Ofgem, IRC. They take the hit on that reduction for every single customer, at a tie when their profits are also capped to under 2%.
I've not seen anyone "defending" the rise - but lots of people explaining it, and trying to clarify why people's assumptions are all too often wrong. I'd suggest that if anyone reading here is not after being better educated on things like this, you'd do best just to shuffle your Daily Fail across the laptop screen and chunter gently to yourself in tones of disgust until the machine goes to sleep...
For complete transparency by the way - as a super-low user of gas I would be substantially better off without a SC to pay - currently in the region of 75% of my bill is the SC...I can still see how higher unit rates would increase the burden on a lot of folk who need to use more fuel for heating etc though, and personally I don't think that's fair at all!🎉 MORTGAGE FREE (First time!) 30/09/2016 🎉 And now we go again…New mortgage taken 01/09/23 🏡
Balance as at 01/09/23 = £115,000.00 Balance as at 31/12/23 = £112,000.00
Balance as at 31/08/24 = £105,400.00 Balance as at 31/12/24 = £102,500.00
£100k barrier broken 1/4/25SOA CALCULATOR (for DFW newbies): SOA Calculatorshe/her8 -
This will happen more regularly now it's updated and in the news every 3 months and we get increased coverage before the Ofgem announcement, then will the government do any more coverage followed by the lead up to the date the new rates come in.
No rest from SC and price changes now.0 -
That's what iirc Utilita do, over 1st 2 units.Spoonie_Turtle said:
How would that work with the set network costs - recouped by a higher unit rate perhaps?bristolleedsfan said:
They can set lower standing charges for fixed tariffs, but there's no market for that right now due to EPG credit suppliers receive for variable tariffs,Spoonie_Turtle said:sevenhills said:
This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.Spoonie_Turtle said:
No doubt you will, it's still a couple of weeks until April and the price changes.sevenhills said:
That is not what I have read!Scot_39 said:coupleuk said:Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).
These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.
How does that help people reduce their electric bill? - where is the incentive?
Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.
Amazed this website does not fight the issue.Ofgem set the standing charge - not the energy firms - not the government.
The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
If Ofgem set the level of the standing charge, we would all have messages about it's increase.
Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost. (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.) Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf
Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October). Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.
They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).
But even empty, I use 1kWh+ in summer, more in winter, fridgefreezer, alarms etc.
But others I guess could save on gas.
So there must be some flexibility in the system.
If one can do it....
But 2kWh not a very high bar, no doubt set to protect firm who must pay it regardless per metered property on their list.
As others have said, over the year, it will come from unit rates at some level.
So at tdcv 2900/12000 8 and 33 per day.
But in a truly flexible world, aybe users average bill.
If they can calculate annual DD off of use, they can calculate the SC offset off of it - result no one wins.
And back to unable to compare.
There is a cost to providing supply, it will be recouped regardless.
And for the poor, the likely protection will be social tariffs, as I believe exist for say water bills (well a discount applied iirc).0 -
They also receive epg credit - capped to epg discount rates and epg unit rates - for the more expensive fixes taken out last summer.bristolleedsfan said:
They can set lower standing charges for fixed tariffs, but there's no market for that right now due to EPG credit suppliers receive for variable tariffs,Spoonie_Turtle said:sevenhills said:
This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.Spoonie_Turtle said:
No doubt you will, it's still a couple of weeks until April and the price changes.sevenhills said:
That is not what I have read!Scot_39 said:coupleuk said:Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).
These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.
How does that help people reduce their electric bill? - where is the incentive?
Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.
Amazed this website does not fight the issue.Ofgem set the standing charge - not the energy firms - not the government.
The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
If Ofgem set the level of the standing charge, we would all have messages about it's increase.
Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost. (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.) Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf
Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October). Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.
They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).
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That's what I thought. But I can't imagine there's much of a market for people willing to pay higher unit rates than they absolutely need to, right now - and that's even if any supplier could hedge enough for a fix at a low enough rate for people to even consider, as they won't get the EPG.bristolleedsfan said:
Yes .......Spoonie_Turtle said:
How would that work with the set network costs - recouped by a higher unit rate perhaps?bristolleedsfan said:
They can set lower standing charges for fixed tariffs, but there's no market for that right now due to EPG credit suppliers receive for variable tariffs,Spoonie_Turtle said:sevenhills said:
This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.Spoonie_Turtle said:
No doubt you will, it's still a couple of weeks until April and the price changes.sevenhills said:
That is not what I have read!Scot_39 said:coupleuk said:Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).
These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.
How does that help people reduce their electric bill? - where is the incentive?
Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.
Amazed this website does not fight the issue.Ofgem set the standing charge - not the energy firms - not the government.
The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
If Ofgem set the level of the standing charge, we would all have messages about it's increase.
Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost. (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.) Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf
Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October). Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.
They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).1 -
Spoonie_Turtle said:
That's what I thought. But I can't imagine there's much of a market for people willing to pay higher unit rates than they absolutely need to, right now - and that's even if any supplier could hedge enough for a fix at a low enough rate for people to even consider, as they won't get the EPG.bristolleedsfan said:
Yes .......Spoonie_Turtle said:
How would that work with the set network costs - recouped by a higher unit rate perhaps?bristolleedsfan said:
They can set lower standing charges for fixed tariffs, but there's no market for that right now due to EPG credit suppliers receive for variable tariffs,Spoonie_Turtle said:sevenhills said:
This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.Spoonie_Turtle said:
No doubt you will, it's still a couple of weeks until April and the price changes.sevenhills said:
That is not what I have read!Scot_39 said:coupleuk said:Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).
These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.
How does that help people reduce their electric bill? - where is the incentive?
Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.
Amazed this website does not fight the issue.Ofgem set the standing charge - not the energy firms - not the government.
The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
If Ofgem set the level of the standing charge, we would all have messages about it's increase.
Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost. (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.) Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf
Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October). Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.
They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).Of course theres a market.Theres even one AFAIK firm already selling to it.Anyone on the right level of use - such that x units daily x the unit penalty doesn't exceed the SC saving would win.Exact maths depending on the terms.IIRC with Utilita - thats 2kWh/day - with 1/2 SC added to both those 2 units - so easy to work out.But for the poorest - still think social tariffs (or social discounts - like water bills ) are more likely to be the govts and Ofgems focus. And if not may be c2025 if Labour win.0 -
I think we're talking about two different things here.Scot_39 said:Spoonie_Turtle said:
That's what I thought. But I can't imagine there's much of a market for people willing to pay higher unit rates than they absolutely need to, right now - and that's even if any supplier could hedge enough for a fix at a low enough rate for people to even consider, as they won't get the EPG.bristolleedsfan said:
Yes .......Spoonie_Turtle said:
How would that work with the set network costs - recouped by a higher unit rate perhaps?bristolleedsfan said:
They can set lower standing charges for fixed tariffs, but there's no market for that right now due to EPG credit suppliers receive for variable tariffs,Spoonie_Turtle said:sevenhills said:
This is from the money saving expert web site - The energy supplier sets the daily rate you pay depending on your location, your chosen tariff and to make the firm profitable.Spoonie_Turtle said:
No doubt you will, it's still a couple of weeks until April and the price changes.sevenhills said:
That is not what I have read!Scot_39 said:coupleuk said:Octopus have announced a 10% Price Increase to the Daily Standing Charge (and knocked a whopping 1p off the unit rate).
These Standing Charges are a disgrace - when wholesale rates tumble, the Standing Charge goes up.
How does that help people reduce their electric bill? - where is the incentive?
Forget unit rates, the biggest ripoff in the energy market is the Standing Charge.
Amazed this website does not fight the issue.Ofgem set the standing charge - not the energy firms - not the government.
The OP has started a thread about Octopus increasing the standing charge by 10%, it's not Ofgem that has announced the increase.
If Ofgem set the level of the standing charge, we would all have messages about it's increase.
Ofgem sets a cap on what 0kWh usage would cost, and a cap on what 3,100kWh electricity* and 12,000kWh gas would cost. (*then converted to 2,900kWh electricity for the cap they communicate to the public for some reason, I don't understand why.) Those tables, by Ofgem, are here https://www.ofgem.gov.uk/sites/default/files/2023-02/Default tariff cap level - 1 April 2023 - 30 June 2023.pdf
Suppliers are free to set a lower standing charge if they wish (and can afford to subsidise those non-negotiable charges - Octopus actually set it at 4% lower than the cap since October). Octopus are also a company that have campaigned against the standing charge, so this increase is certainly not an arbitrary decision by them and them alone.The energy supplier is regulated by industry body Ofgem, who impose limits on how much can be charged.
They can set higher standing charges for fixed tariffs, but there's no market for that right now and people would almost certainly not choose to pay a higher standing charge than they have to (i.e., higher than the SVT).Of course theres a market.Theres even one AFAIK firm already selling to it.…IIRC with Utilita - thats 2kWh/day - with 1/2 SC added to both those 2 units - so easy to work out.
What was mentioned was a fixed tariff with a lower standing charge, but (I inferred) consistently higher unit rates to recoup the rest of the standing charge.
New fixes don't get the EPG discount. So can they hedge enough energy at a cheap enough undiscounted rate, plus the extra on top of unit rate, and have enough customers willing to pay a consistently higher unit rate than they need to?
There may be a tiny market, but the main people who would choose it would be those better off - or I guess people who hate the standing charge and would go with it out of stubborn principle even though it would work out more expensive? - is there enough of a market where the supplier would make a profit to make it a viable business decision?
In terms of people struggling, I don't know what the answer is. I quite like Octopus' approach of individual cases where one option is a standing charge holiday. Any other generalised criteria undoubtedly would leave out people who genuinely need the help. The absolute worst thing to do would be to tie it to existing benefits; there's already a cliff-edge where people earn just too much for benefits but are worse off, in the gap between that threshold and where they earn enough to replace lost financial help and actually become better off. Tying something else to benefits would widen that gap and trap more people.0 -
I'm with Octopus in the Midlands and consume 2000kWh/year.
The 1 April tariff change amounts to an annual saving of 71p. I'm already thinking about what to spend it on!
3 bed det. built 2021. 2 occupants at home all day. Worcester Bosch Greenstar 30i combi boiler heating to 19-20C from 6am to midnight, setback to 17.5C overnight, connected in EMS mode to Tado smart modulating thermostat. Annual gas usage 6000kWh; electricity 2000kWh.0 -
Hi @EssexHebridean ...
cc: @coupleuk, @matt_drummer ...
It would be interesting to know what the ONS have regarding wealth/income and electricity expenditure statistics.EssexHebridean said:
And the bit in bold is where it all falls apart - it's a false assumption to conflate "worst off" and "lowest users" - often the worst off in society also have the poorest insulated houses, health needs that require higher heating bills etc.coupleuk said:
The same as it should be with Car Tax.matt_drummer said:Why is the standing charge a rip off?
The supplying company gets none of it.
How do you propose to pay for the costs of distributing energy to your home?
Use more energy, pay more per unit/litre.
Those who can least afford the cost are proportionally worse off.
Where is the encouragement to save energy when tied to high standing Charge.
Far easier to cut back and get the benefit when coat is unit based.
I would imagine that there are quite a high proportion of those in the lowest decile who would be in the lowest decile for expenditure, with varying levels of heating/insulation.
Anecdotally a lot of people have struggled with their heating costs and have cut down, not all being the stereotypical 'heat or eat' poor. Take me for example, an OAP living on solely new state pension, I have cutdown my costs from around £2,000 to about £1,000 per annum of which about £180 will be SC.
In my view if the flat charge, which is a tax really, were replaced with a 5% charge abolishing the VAT, then the poorer would immediately benefit without the need to use subsidies such as the poorly targeted EBSS and EPG.0 -
If the sc was replaced by a percentage charge added to the unit cost, it is almost inevitable that we would end up paying too much or too little to the network operators.
The fixed costs are just that, fixed. It follows that to ensure that the network operators get the funds they require and not too much, the amount they receive is fixed and does not vary with usage.
We would all be unhappy if they get too much for operating the network and who will pick up the shortfall if they don't receive enough?
The standing charge is not a tax, it's the fixed costs of supply divided by the number of people who use it, why is this so hard to understand.
If you don't pay your share of this, somebody else will have to pay more, be it other users, the energy retailers or the government.
Where will the government get the lost revenue from 5% Vat that is removed?
I understand your frustration, the standing charge is a large part of your annual spend on electricity and you can see that if it was less or removed completely that you would have saved even more money.
But the reality is, you just want to pay less, like most people.2
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