A HUGE shake-up to hated energy charges could cut bills for millions of households if proposals from the government are implemented.
The Department for Energy Security and Net Zero is considering shifting the Warm Home Discount costs off the standing charge and onto the unit rate.
Gas and electricity standing charges could be cut by £39 a year from April 2026 if these plans are given the go ahead.
Currently, standing charges make up £320 of the average household’s electricity bill.
Standing charges are a fixed daily fee that customers are charged for just having electricity.
Price can vary from region to region and also depending on whether you pay for your power via direct debit or a prepayment meter.
Meanwhile, unit charges are the amount you pay for every kilowatt-hour (kWh) of electricity and gas you use.
The government has launched a consultation on the switch with it due to close on January 6.
Martin Lewis, founder of MoneySavingExpert, said he was “delighted” by the news.
Martin took to X to say: “We’ve long called for these charges to be lowered, as they unfairly penalise lower-use households and those looking to cut their usage.”
“The current standing charge is a moral hazard that disincentivises lower usage and keeps bills high for people who use very little energy. “
He added: “It’s the biggest single cause of complaint I get about energy bills, by a mile. Paying £300+ a year simply for the facility of having energy is too much.
“It also penalises older people who don’t use gas in the summer yet still pay for it every day.”
In her Budget last week, the Chancellor also stripped £150 of green levies from bills from April.
It comes as households brace for a New Year rise in energy bills.
Those using a typical amount of energy will see their bills hiked to £1,758 from January 1, after regulator Ofgem announced a surprise increase to its price cap.
The rise equates to an average increase of 28p a month, and marks another increase after bills rose by 2% – or £35 a year – in October.
The price cap is the maximum amount energy suppliers can charge you for each unit of energy and standing charge if you’re on a standard variable tariff.
Help with your energy bills
If you are worried about rising costs, know that there are plenty of schemes and benefits which can help you if you are struggling.
For example, if you are of state pension age (66) you could be entitled to a £300 cash boost to put towards your energy bill as part of the Winter Fuel Payment.
The cash landed in accounts in November, but many will also receive the money in December.
Better yet, anyone who was born before September 22 1959 and lives in England or Wales can receive the payment.
You can also get a £25 cold weather payment from the DWP.
But temperatures must hit zero degrees Celsius or below over 7 consecutive days for the sum to be paid out.
To be eligible for the support you must be claiming certain benefits such as Universal Credit, Pension Credit and Support for Mortgage Interest.
You do not need to apply for the scheme as the money will be paid into anyone who qualifies account within 14 days.
You could also get up to £2,000 in debt relief through the British Gas Energy Trust.
The fund is available to existing British Gas customers who are experiencing energy debt or at risk of fuel poverty.
But you will need to have an energy debt between £50-£2,000 on a pre-payment meter or £250-£2,000 on a credit account, to be eligible.
For more information on how to apply you can visit, britishgasenergytrust.org.uk/grants-available/.
5 ways to keep your house warm in winter
Property expert Joshua Houston shared his tips.
1. Curtains
“Windows are a common place for the outside cold to get into your home, this is because of small gaps that can let in air so always close your curtains as soon as it gets dark,” he said.
This simple method gives you an extra layer of warmth as it can provide a kind of “insulation” between your window and curtain.
2. Rugs
“Your floor is another area of your home where heat can be lost and can make your home feel chilly,” he continued. “You might notice on cold days, that your floor is not nice to walk on due to it freezing your feet.
“Add rugs to areas that don’t already have a carpet, this provides a layer of insulation between your bare floor and the room above.”
3. Check your insulation
Check your pipes, loft space, crawlspaces and underneath floorboards.
“Loose-fill insulation is very good for this, and is a more affordable type of insulation, with a big bag being able to be picked up for around £30,” Joshua explained.
4. Keep your internal doors closed
“Household members often gather in one room in the evening, and this is usually either the kitchen or living room,” Joshua said.
“This means you only have to heat a small area of your home, and closing the doors keeps the heat in and the cold out.”
5. Block drafts
Don’t forget to check cat flaps, chimneys and letterboxes, as they can let in cold air if they aren’t secure.