Norfolk foodbank says charities will struggle to offer help if high energy bills continue to drive up demand
From January 1, average standing charges will decrease slightly to 60.97p per day for electricity and 31.65p per day for gas
The leader of a foodbank in West Norfolk is warning that charities will struggle to support people moving forwards - if demand on them, created by rising energy bills, continues to increase.
It's as the energy regulator has called on companies to offer customers deals with no standing charges by next winter - arguing that changes are needed to support those struggling to pay their bills.
"This would help a lot of people"
Helen Gilbert is project manager at King's Lynn Foodbank: "Compared with two years ago, we've given out 152% more energy vouchers this summer than we did in the summer of 2022.
"63% of those went to those on pre-payment meters."
Helen says these plans wouldn't be a 'sliver bullet' for all those struggling, though: "People with disabilities or health issues would be hit harder by adding the standing charge proportionally to a unit rate fee, because they can't reduce their energy usage.
"This is something that is swings and roundabouts, but in the large this would help a lot of people."
The plans in greater detail:
Under Ofgem's price cap, standing charges have risen by 43% since 2019, and from January will cost dual fuel households an average of £338 a year, although they disproportionately affect those who use less energy as the fixed costs make up a higher proportion of their overall bill.
Since October 1, households on a standard variable tariff that pay for their electricity by direct debit have paid on average 24.5p per unit, with a standing charge of 60.99p per day. For gas, the average has been 6.24p per unit with a standing charge of 31.66p per day.
From January 1, average standing charges will decrease slightly to 60.97p per day for electricity and 31.65p per day for gas.
Standing charges pay for the fixed costs to suppliers of providing energy to homes.
Some suppliers already offer low or no standing charge tariffs, which are at least 10% below the price cap, but they are not universal.
However, while these tariffs come with a lower standing charge, they do have a higher unit rate, and are therefore more likely to benefit customers who use less energy.
Ofgem said tens of thousands of consumers responded to its call for input on standing charges, with many asking for them to be removed altogether, saying that this would make it easier for them to manage their bills or pay back debt.
However, those who were high users of energy, often for medical and health reasons, would see their bills rise significantly, meaning it was important for households to retain a choice of tariff.
Ofgem also set out plans for a "debt guarantee" to improve the standard of service offered by suppliers supporting customers in debt, which it said would give households "consistent, compassionate and tailored support".
Suppliers could also be required to accept debt repayment offers from reputable third parties such as debt advice agencies or consumer organisations.
It also warned that the level of debt built up during the energy crisis had become "unsustainable", saying it required a "bespoke, one-off solution to tackle it that will drive down the costs of debt in the long term for the benefit of all consumers".
Energy debt and arrears have continued to grow, reaching £3.82 billion in September - a 91% or £1.82 billion increase in two years.
"We want to give consumers the ability to make the choice that's right for them"
Tim Jarvis, director general of markets at Ofgem, said: "We know that many households continue to struggle with bills after the events of the energy crisis, which is why earlier this year, we took steps to consider all the issues around affordability and debt - including the impact of the standing charge.
"Today we're setting out the next steps in what Ofgem can do to meet these challenges, as part of our work to make sure the energy market is working in consumers' interests.
"Many people feel very strongly that standing charges are unfair and prevent them from being able to manage their bills effectively.
"We want to give consumers the ability to make the choice that's right for them without putting any one group of consumers at a disadvantage. And by having a zero standing charge tariff, we would create that choice for everyone."