I don’t want to pay permanent charges for my energy and I feel like this system is outdated, but all the energy tariffs without them seem to be gone.
As a retiree, I worked for nine years with EBICO, a non-profit organization, based on ethics, with a tariff without permanent costs, because I was often away from home and consumed little energy when I was there.
But EBICO folded in 2020 and said the new energy price cap regime meant it could no longer offer zero ongoing fees.
I contacted a comparison website, which told me that no permanent fees were waived, so reluctantly I have to pay permanent fees to Octopus even when nothing is used.
A standing charge for a customer with typical usage is 25p for electricity and 26p for gas per day and is expected to rise to 45p and 27p respectively from April, with the new price cap (pictured posed by the model)
Permanent no-cost tariffs all disappeared around the same time in 2018-2020, penalizing poorer low-energy users, despite the public face of supporting low-energy to save the climate .
I think having ongoing charges makes it more difficult to compare energy prices.
I think the argument of paying just to have a connection is specious, any connection cost should be factored into the unit cost, as is the case with gas stations, which makes it easier to compare prices.
Why do we have to pay ongoing fees, how much have they increased and are there offers out there without them? By email.
Emilia Shovelin responds: With energy prices soaring, you are right to question any element of the bill, including ongoing charges.
What is that? Think of it as a line rental, but for your energy.
A fixed charge is a fixed daily amount on your energy bills that you must pay and covers the cost of supplying your accommodation with gas and electricity.
Will Owen, energy expert at Uswitch.com, said: “The ongoing charges on your energy bill cover the fixed costs of delivering gas and electricity to your home.
“Each will have a separate standing charge on your bill.
“These charges include the price of keeping your home connected to the energy grid, taking meter readings, maintenance and other costs.”
Will added that a portion of your ongoing fee “goes to government initiatives to help vulnerable homes, such as the Warm Home Discount, and reduce carbon emissions.”
Changes made by Ofgem to the energy price cap from October 2021 to April 2022.
How much are the charges and do the prices increase?
If you have a smart meter you will still have to pay the ongoing daily charge for your energy, but it is often lower than what you would get with a standard meter because there is less administration for the suppliers.
Over the course of a year, the ongoing charges can add up to quite a significant amount, depending on the tariff you are on.
Typical on-going charges range from 5p to 60p per day for electricity and 10p to 80p per day for gas.
Currently, the ongoing daily charge for a customer with typical usage paying by direct debit is 25 pence for electricity and 26 pence for gas.
This is expected to rise to 45p and 27p respectively from April when the new price cap comes into effect.
This is currently an additional £7.59 per month, or £13.65 per month after April, although this will vary depending on your provider.
Are there any providers with ongoing no-charge rates?
Energy offers with no ongoing costs have never been particularly common, they can be useful for those who use very little energy or for those with empty properties.
And, if you get a tariff without permanent charges, the cost of this energy may still be higher than what you would pay with a fixed or standard variable tariff.
If you’re looking for an energy deal with no ongoing charges, Utilita continues to offer its Smart Energy a la carte tariff, with £0 ongoing charges.
However, you still have to consider whether this is the best and cheapest option for you, especially as energy prices are expected to rise significantly over the next month.
Alex Hasty, director of Compare the Market, said that with the uncertainty in the energy market, ongoing no-cost tariffs are likely not the best option for most households.
Alex said: “It should be noted that the charge is a base rate for the daily provision of energy services. It’s not consumption-based. If people consume little energy, this will affect their consumption and, therefore, their cost.
What type of energy tariff is right for me and how can I save money on my energy bill?
When asked what households can do to reduce the cost of their energy bills, despite the daily load, Alex suggests that households could look to specialist tariffs such as an Economy 7 (E7).
Alex said: “These have two tariffs for electricity – peak and off-peak. Generally, off-peak hours are between 11 p.m. and 7 a.m., this period being cheaper to use electricity than during peak hours.
“If households use their electricity during specific windows and reduce their consumption during peak periods, they can benefit.
“However, they would have to make arrangements with their supplier and could be subject to an additional cost.”
But what about households that have already reduced their energy consumption?
Alex suggests that it’s worth considering which type of fare suits your needs, as a default fare may get you the best price instead of a flat-rate alternative.
Alex added: “At the end of the day, the market is in a very difficult situation right now. The cost of energy, whether high or low, is increasing.
“It is financially better for most households to switch to a default rate – or standard variable rate (SVT) – rather than opting for a fixed rate alternative at the end of their current contract.
“To help you save money, we suggest you look at other household bills such as home and auto insurance and see if you can upgrade to a cheaper deal.
If in doubt, it’s always worth contacting your current energy provider to discuss your options and the best energy rate for you.
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