Martin Lewis Reveals Why the Energy Price Cap Drop Isn't All Good News

Ofgem, the energy regulator, has confirmed the amount you pay for gas and electricity will be dropping by an average of 7%, which will come into effect from the 1st of July. But what does that actually mean for households?
Martin Lewis explains why the energy price cap drop isn't all good news.
Broadcast on 24/05/24
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[@iansinclair7581]

The standing charges are disgusting. Ofgem only work for the power companies not the consumer.

[@IMBlakeley]

I lived away for 8 years, none of the utilities had standing charges, I just paid for what I used. In the case of electric the first 200 units were at a cheap rate, then it went up for the next 200 and so on.

[@WhichDoctor1]

the UK is a rentier economy. Too many people make money purely off owning things other people need to live and charging us for the privilege of access. They often also charge for using it too, but they make sure you have to pay them even when you don't use it, or when they simply fail to provide it. And we have no choice but to pay up because It's that or live in a tent in the woods and get all our belongings destroyed by the police every couple of months

[@fredatlas4396]

I think the so called regulator was set up by our tory government since 2010. The tories are in control of the regulator. Surely they could have capped the energy prices at a much lower rate just like some other countries including France & Germany for example. It really looks like we are being scammed by our own government. The tories are a bunch of crooks, they're con artists

[@sorinhodosan458]

Biggest SCAM ever : STANDING CHARGES !!!

[@turboslag]

The standing charges are obscene, also they shouldn't be permitted. Standing charges were in place for the time when gas and electricity supply were a nationalised industry. It was to contribute for the maintenance and expansion of the infrastructure because as nationalised industries they didn't make profit. So why, when they were privatised, were these now private companies allowed to make standing charges?! They make profit, so their running costs should come from that, we should not be paying for the upkeep of their infrastructure, which they inherited anyway?! It's a complete scam!!

[@martynheritage-owen3804]

Because they borrow to invest and lenders need paying.

[@turboslag]

@@martynheritage-owen3804 Well yes, that's how private companies work, but they don't get to charge the consumer for their costs, on top of the energy they supply. Their costs should come from their operating profit. Worst of all is that some of these companies are foreign owned!! And high energy prices are a massive part of the cause of high inflation.

[@martynheritage-owen3804]

@@turboslag every company charges their labour costs, material costs including taxes and profit. That is basic business principles. It doesn't matter what the business is.

[@turboslag]

@@martynheritage-owen3804 Yes, I agreed! But a private company, should not be able to add additional costs to the price they charge for their product or service, in the form of standing charges. And these are charged by utility companies whether any energy is used or not!! We don't buy fuel for our cars then have to pay an additional surcharge to cover the oil companies infrastructure costs!! Obviously their overheads are built into the prices they charge for their fuel, but we don't pay a continuous standing charge whether we buy fuel or not.

[@martynheritage-owen3804]

@@turboslag no different to a service charge in a restaurant. You pay for Internet or telephony whether you use it or not. Look I think there is a case for the standing charge to come down but they will only claw back the revenue in other ways. Do you want to pay say 20‰ more per unit in the winter or between 4pm and 7pm. Look up the charging models for solar tariffs and see what is possible.

[@chrysalis4126]

So now we aren't using any heating we are getting a 7% decrease but come October when we all want to put our heating on its going up 12%. Wow thanks Ofgem.

[@garnhamr]

love this modern capitalism

[@vee1324]

What a shock🤬

[@michaelgoode9555]

That's the deceit of OFGEM for you. I see this as an entirely political decision hand in glove with Dr. Death.

[@trevorphillips3055]

Supply and demand. Look at what happened to petrol and diesel prices during covid when no one was using it!

[@andrewdancer8520]

That’s because Ofgem is run by people placed there from the energy companies and the politicians want jobs at those companies when they leave their snout trough’s at Westminster as consultants.

[@Melanie_Star]

Let's have a massive windfall tax on those disgusting energy companies that make more cash every year than they know what to do with, while we normies have to pay through the nose & make choices between heating or eating. Push the billions raised back into our well needed public services. Martin Lewis is a truth teller that never stops fighting for us & he deserves some type of recognition, IMPO a knighthood!

[@esecallum]

no. lower the unit costs. and the standing charges.

[@patdbean]

If you have a windfall tax. Firms may go out of business and we will end up like South Africa. With Massive rolling blackouts.

[@alan_davis]

​@@patdbeanhilarious mate. A windfall tax taxes excess profits. You don't go out of business if you have excess profits.

[@patdbean]

@@alan_davis and your definition of excess is? Power firms do go broke, I would list at least 3 form the USA alone. We need more competition, not less.

[@davidbedwell8503]

Get rid of standing charge!! Shouldn't haven't to 'line' bosses pockets!!😮

[@mikadavies660]

It is the Standing Charge that needs to go down.

[@kiddcapri1711]

This

[@nicholaspostlethwaite9554]

NO it does not! It needs straight abolishing completely as plain immoral and wrong in concept.

[@jonathananderson3897]

Privatisation has lead to us having a cartel. There's no competition at all between suppliers, we are being squeezed purely for profits. My supplier owes me 1800, been hugely overpaying, getting it backs been impossible

[@terrybucknall7158]

It's about time they scraped standing charges it s a insult to all .

[@KishenPatel25]

There is a company, Utilitia that has dropped standing charges. They’re priced so much more expensive than other companies though

[@mkeith152]

Think about every home pays about £300 pounds a year just in standing charges

[@beadle111gaming]

Martin Lewis should be getting a knighthood. Look at all the clowns in the UK who have one, completely undeserved. This guy overcame mental health issues, created a business, became successful and is using his wealth and influence to affect and change the lives for everyone (particularly the elderly and vulnerable) and I'd argue more than any government or one person has.

[@Oldmanpeace]

When all the clowns have a knighthood, what is the meaning of a knighthood?

[@robertlamont9455]

Living in Europe, my standing charges are built into the price per unit, and it's the the same price per unit no matter where you live in the country, it's so much simpler.

[@simontay4851]

Exactly as it should be.

[@bjm1711]

@@simontay4851Maybe so but the unit cost would be higher… there is no way to avoid paying for the upkeep of the infrastructure. We need to ensure the ongoing maintenance of the fuel supply infrastructure.

[@lonyo5377]

​@@simontay4851no. Standing charges make perfect sense. The cost of maintaining the lines to provide gas or electricity still exists even if you don't use it

[@tonykelpie]

So a 7% fall, followed by a rise to 4% above current charges. Standing charges still a significant problem.😕Keep plugging away Martin!

[@Nicho2020]

So, they crank up the standing charges and keep stuffing their pockets!

[@prideofdurham4776]

The price drop is only until October when it rises again.

[@trevorphillips3055]

Did you watch the video?

[@sharonwyatt298]

Yes for me it's all the standing charge. Especially the electricity it's ridiculous. Through winter I had my heating on for 1 hour at night and walked around mostly in the dark,I know at 71 it not a good thing but that's how I survived.

[@nicholaspostlethwaite9554]

Modern LED bulbs really do not use much power at all. Heating water, food, or rooms is the power hungry use.

[@onetone4561]

In Germany there is so much solar energy and prices have fallen to almost zero

[@MinkieWinkle]

In Germany, their industry is shut down, in the coming years, Germany will deindustrialise. Germany has sacrifices almost all of its manufacturing to lower demand, but people will have cheaper bills and no jobs.

[@martincardoso2494]

Rigged market

[@alanoliver535]

The standing charge is a cost put on for the maintenance of the supply infrastrucer,this should be built into the unit price asmost other countries do.

[@donjesson7160]

You can guarantee the standing charge will go up.

[@mrtom3297]

Crazy that even renewable prices are linked to gas.

[@peteell9169]

Really they couldnt lower the standing charge. It makes me so angry. Survived most of the winter at 16 degrees in the house and one light bulb lit. Surely we deserve to get some energy included in the standing charge. Tired of struggling and subsidising tgis system. Its 50% of my bill through the summer. Lets get rid of ofgem absolute waste of time. Keep up the fight Martin!! Maybe we should be all demonstraing outside Ofgem headquarters!

[@nicholaspostlethwaite9554]

That is comical! 16C is very warm, I have never considered heating use unless it is single figures C at least. 15C is a really nice spring day! No need of any heating whatsoever. This is most people's problem they have this madcap attitude to grossly overheated whole houses. The blight of the nasty modern central heating obsession. Standing charge has absolutely no legitimacy whatsoever. It is a blatant scam. We do not pay standing charges to go into a shop to cover their overheads, they are covered in the prices of the goods we buy. As should all Power company's costs be.

[@DARRENJOHNHARRIS1]

Ban the standing charge

[@ironsoul2633]

Living in the UK feels like you are LEGALLY ripped off from all parts and there is nothing you can do about it... My council tax now is half of my mortgage (I have no kids, what do I pay for exactly) , my car overall (nothing fancy)now costs more than my mortgage (including fuel, road tax, insurance, NOT and car payments) and I need my car to work... My mortgage has almost doubled and so have my energy payments... And the worst is all these company are posting record profits!!!!!!

[@petertheboomscott2104]

The government neet to prevent these companies have to cap there profits and keep prices down.

[@user-ol6rd7pl5t]

We don't just need price caps we need profit caps too.

[@Melanie_Star]

Hear hear! 👏🏼👏🏼👏🏼

[@MinkieWinkle]

Answer me this, What happens when a business reaches that profit cap, and then decides to shut down for the rest of the year, until the next financial year come in. What do you think that will do to the supply chain and in turn, the prices

[@user-ol6rd7pl5t]

@@MinkieWinkle provided the company has provided a service at minimal expected level any excessive profits can be used to bring down the costs to customers, there's a huge difference between making a reasonable profit & greed.

[@b.nichols3255]

"What does that mean for households.....". It means that the standing charge will increase to make up the difference. That is how it works, OFGEN is not settling caps, it's setting prices.

[@gazsm1]

Just wait, I'd lay money that come October-December the price cap will rise just enough to cover what the energy companies lost by the upcoming lower price cap....the energy companies and oil/gas companies will still be making record profits as per usual.

[@GG-ml3vr]

Great,so now its not stupidly expensive its only scarily expensive ,are we ment to say thanks?😀

[@alexfielding8411]

Someone needs to explain why standing charges, and the cap, is lowest in London by almost 33% compared to most other cities

[@TheGippy30]

We’re still being ripped off

[@StefanHolmes]

Comes to something when having a home that runs its central heating and hot water from heating oil is starting to look like a good deal. No standing charge. Now if only I could go off grid with solar and battery.

[@martincardoso2494]

Energy cap is going down until the elections are over

[@jamesbarbour8400]

Oh come on, you can't tell me with a straight face, that those two things are somehow linked.......😆

[@user-ol6rd7pl5t]

That's good news, it should bring my bill down to just under £1a day.

[@Ldn12345]

Just in time for summer! Thank you energy companies, I hope it won’t knock your profits too much.

[@Pegaroo_]

If you have gas the likelihood in you WILL use it every day since most with gas will have their hot water heated by gas

[@gatekeeperboxing5898]

Government needs to put a cap on standing charges as the energy companies will just hike the standing charges when the price cap drops.

[@anthonypert574]

So about 220 quid a year with out usage

[@jamiegraham7639]

I'm on payg and just don't top up the gas if I don't use it. I'm not paying for something I'm not using.

[@almostfamous1685]

If they get rid of standing charge I’d bet any money they’d just up the prices of gas and electric to compensate.

[@darrenbrians5930]

The french in our power stations will put the price up in winter like they always do. Why should the french pay to build power stations in france. When they can make us pay.

[@davidmatthews3093]

I don’t think you understand.

[@darrenbrians5930]

@@davidmatthews3093 wholesale prices are the problem. EDF set the wholesale price. It should be nationalised.

[@jamiepolson]

What’s the chances of cheap overnight tariffs lowering too?

[@user-lc1wk5dh5h]

Go to Utilita no charge but first 2 units are more expensive so if you don’t use you don’t pay but as I say first 2 units of gas and electricity are more expensive

[@arthurdixon5890]

It was always obvious that the measures we used to save using energy would result in the energy suppliers increasing the cost. It’s business and they need to keep the business going. You can choose not to buy a new coat but you will always boil a kettle. Thank you, Martin for this comment. The BBC glossed over this on the Today programme.

[@robhingston]

they time it, right on autumn/winter

[@MinkieWinkle]

Well year... that is the point, since winter demand rises... its colder

[@Lfkoda]

Yeah, my bill came at 60 with 24 service charge lol

[@Zerion]

Energy VAT needs to be cancelled as well.

[@davidbowie2046]

We never used to pay a standing charge, but a higher price per KWH for the first so many, then the price would drop for the rest. Also not mentioned, is the varying prices of standing charges in different regions of the country. Here in the North West, is the highest of them all!

[@rmximaging1361]

Due to the standing charge, and having a few solar panels, I will often have to pa y£30 per kWh in the summer. If I have a car and do not use it , I do not have to pay for the fuel to be delivered to a petrol station, just in case I want to use the car. The standing charge is hitting the poorest and most vulnerable people in the country and should be discontinued, then a charge put onto each kWh of electricity, such as a duty is added to the price of petrol. It is that simple. I would also suggest that I feel Ofgem is probably not fit for the job.

[@pcat1378]

Its not a cap if it keeps moving

[@jsouto77]

There are companies out there that do not charge a standing charge as such for gas at least ... its bundled into the first two units of use per day hence if you dont use any, you dont get charged. If you have an immersion heater and can getaway with heating your water on cheap rates or solar and batteries. For this scenario, the only gas appliance I have left is the boiler and turn it off in the warmer months and turn on the immersion for hot water. Comes the colder months I then turn off the immersion heater and turn the boiler on since ill be using those first two units anyway for the central heating.

[@patrikfloding7985]

Isn’t electricity about 4 times the price of gas, for the same energy usage?

[@jsouto77]

@@patrikfloding7985 Yes it is if you are on a standard tariff. In my case the electricity is only 7.5p per kw on the off peak rate which is about the same rate as gas after the first two units in my case. Also electricity is more efficient thus also reducing the price a bit.

[@MinkieWinkle]

Electricity is always higher than gas, since gas is used to create electricity in the first place, such such the price of gas is factored into the cost of electricity.

[@jsouto77]

@@MinkieWinkle Gas, coal, coal, solar, wind and hydro can be used to create electricity. Like I said, gas is a few (about half a pence) cheaper than electricity in my case per KW. However since electricity is more efficient when it comes to cooking and heating, that actually makes it a bit cheaper (over 40% for cooking and about 15% for the hot water)

[@MinkieWinkle]

@@jsouto77 Yes however, since in the UK gas is by far the main source for electricity generation, all electricity is then based on the price of gas for standard tariffs. there are a few exceptions, that simply do not apply to the masses, say like solar tariffs, with panels on the roofs, but they are not an example of cheaper energy, since the panels have an upfront cost of several grand. So anyway, do tell us, what is this so called tariff and who is it supplied by that you claim to be on

[@ericritchie6783]

The biggest part of my bill is standing charges, so those who use the least have to disproportionately subsidise the one's that use the most?

[@Barbarapape]

I hope the message gets through on standing charges, they are just plain wrong. You don't pay an upfront fee for other esential services so why should you for energy. I use zero gas most of the year, yet it costs me almost 32p per day here in North Wales for something that i don't use.

[@roadbiker8333]

STOP THE STANDING CHARGE!!!! This is ridiculous. It is like punishing households who are trying our best to reduce the amount of electricity and gas we can!! I am currently paying more standing charge than what I have used. It's contributing 60% of my bills!!!!! I might as well use more and just be as wasteful as I can.

[@keiththomas2253]

Does anybody other than British Gas offer a low usage tariff with reduced standing charges?

[@bjm1711]

How would the national energy infrastructure be maintained without the standing charges?

[@craigwebb4012]

Why cant they do it the other way cheaper in winter and increase prices in summer that would be a better balance. And then on top of it all scientists are making winters colder and wetter . With the cloud seeding and using there weather controlling satellites. So it makes people use more energy for extra heating

[@allan4787]

Why????

[@b.nichols3255]

Don't forget the rip-off standing charge. Energy prices drop by 7% but standing charge will go up to compensate.

[@arunmookherjee900]

Everything appears upside down to me!!

[@johnbluett6079]

I am a frugal lad my average energy bill is about £ 2 . 97 pence of this is STANDING charges

[@michaelgoode9555]

Standing charge should be removed completely and the unit price should incorporate the so-called standing charge cream off. OFGEM are thoroughly disgraceful and needs massive reform. C'mon Sir Kier: remove the standing charges completely and pay per units used only.

[@hometechUK]

It actually means we will ONLY save about £30 over the next 3 months as the price will increase in 3 months time.

[@martynheritage-owen3804]

We need to be fair here without a standing charge at all the turnover for gas companies would be so seasonal they would have to lay off staff and would be unable to invest in improving the infrastructure is an all year job.

[@wgj4813]

A nationalised energy pricing policy in all but name and you can bet it guarantees the energy companies great profits. Why cannot we nationalise the energy companies profits.

[@user-sj4nh5ku2p]

Very impressive as always. However can’t remember the last time an election candidate knocked on my door. Just doesn’t happen : probably too scared to !

[@trevorphillips3055]

Call me cynical, but would scrapping the price cap make a difference? Wouldn't unit prices just go up to claw back the money being lost?

[@adriengallet1831]

Yes it would, but it would shift the cost burden to high volume users, think big houses, non-stop heating etc.

[@trevorphillips3055]

@@adriengallet1831 I doubt the majority would be better off, but that's just me being cynical. 🙂

[@TheeMrAbz]

Would 100% vote for Martin Lewis if he stood in my town

[@paulrea7673]

Standing charge 60p a day is wrong , there are no periodic meter changes to recalibrate a meter (60p job?.) No meter reader which was part of the 60p. Removing the meter reader and not changing the meters then standing charge must be removed as you’re paying for a service not being given. Energy companies are taken a payment and not giving the customer a fair deal. I know the power coming via the o/h lines need to paid for BUT that should be included in the main bill EVERY CUSTOMER OUT THERE NEED TO SHOUT OUT ABOUT THIS DONT SIT BACK AND EXCEPT THIS WRONGFUL CHARGE. SO £219 per year for what ( meters do need recalibrating I know I worker with them for 51 years ) This is a fee that the utility company’s think they have a right to charge Going from a 27p per day fee to 60p is robbery ,not long before it’s a£1 per day

[@paulrea7673]

Hi I was only thinking about the electricity meter, then there’s the GAS meter. What ever these companies charge the must justify the charge . We need someone with influence to help us . One other thing when you have work hard all of your life you are taken as an easy target,if you decide not to work you are helped with all sorts plus real help with utility bills who are the mugs here. If there is an m.p. Who can help and make a difference please do it. But I do say some people who are disabled DO need help.

[@anllpp]

Whoopee. Should never have increased that much and never got nowhere near. Just ripped off day in day out

[@kevinm-fr4wl]

Surprise surprise gas going up just before winter......i wonder if Australias gas goes up in their winter as it would be our summer..if so then it proves its driven by greed not wholesale price of gas

[@Mick727]

Blame the politicians they let the gas and electricity companies get away with it also it helps with the government’s net zero agenda you are forced to cut back because of the cost still at least our money grabbing mp’s will be nice and warm this winter

[@UtubeRwokeLefties]

Wouldn't it be wonderful if we didn't have a quango that is in the pockets of the energy companies.

[@user-wj7cv9hb5j]

If labour get in of course it will go up as the pound will collapse 😂 ita like crying when you get what you ask for 😂

[@willyhill7509]

Are our leaders so economoically illiterate that they think that a Government can set the price of anything ?

[@anthonypert574]

Give in 1 hand take with the other

[@jumior]

yea its summer , mugged off again.

[@japfourme381]

They say that the energy price increases are due to the War in UKRAINE, they also claim that they’re so high because energy Companies need to invest in green energy? Well I say this, have you seen the enormous profits they’re making? Take a look at how much investment of that massive profit goes towards green energy, it’s a pittance! The massive hikes in energy prices are all down to one thing GREED!!

[@dukethenuke8426]

Nothing but the normal shady political shenanigans by given you a fiver in one hand whilst stealing a tenner out of your back pocket 🤷🏽

[@user-yq3nu5hd6n]

Scamming You need a pHD To work it out

[@Pulpdiction1999]

Still need to call out that the price of wholesale gas is linked to electricity price even though only 40% of electricity is generated using gas. It's a rip off and you need to be campaigning for this to be changed Martin. It's had more impact than the standing charge.

[@Deppel57]

Martin is a great people's champion and also a very large donor to Citizens Advice, a great organisation that is there for us all to ensure people get the help they need with any issue.

[@paul_my_plumbs_uk]

On universal credit means £0 to me💷💷👈👎👎👎

[@duncabiscuit]

Standing charge is a con. Also, the cap is just a way of energy companies making large profits without real competition. The whole thing is a con.

[@nicholaspostlethwaite9554]

The cap was brough tin directly due to the energy companies deliberately cheating everyone that did not switch like a lunatic all the time. Non switchers were cheated with higher prices used to subsidise the switcher's prices. It is a scam used in many sectors, to cheat the customer that is loyal or not constantly looking to go elsewhere.

[@travellingtom6091]

Well done for staying neutral politically.

[@SHINBAXTER]

SO WE GET CHARGED OVER £20 MONTH EVEN IF WE DON'T USE ANY GAS OR ELECTRIC. THE CROOKS!!! XD =)

[@aaronmccardie8795]

This gentleman should be in government looking after the people of this country.

[@grahamcook9289]

The gas standing charge is a good reason to eliminate gas from your home. The easy change is in the kitchen with an induction hob and electric fan oven. Definitely get rid of any gas fire, if you still have one. And lastly change the gas boiler for a heat pump.

[@alanrobins]

Fit Solar if your roof allows I have not paid for any electric for 18 months now and got a credit for £450.00 from last year I use oil not gas so the credit pays for 50% of my heating bill

[@ianholden7]

It's still a con

[@anthonyjones6962]

You should just pay for what you use .scamming

[@cpuuk]

Shareholders continue to rake it in, literally at our expense.

[@user-xw3zu1gm4q]

Just fixed and my electricity will be 25% cheaper than the last year. Still too expensive but it is cheaper so I’m not sure what the moan is all about. Oh now I see it’s moaning Martin Lewis and his band of deciples.

[@richardrussell7082]

Martin Lewis would be the perfect chancellor but he has far too much integrity and scruples to get into politics.

[@hectorheath9742]

Woman needs to stop groaning, and chiming in while Lewis speaks.

[@allan4787]

Three people who have not a clue

[@TheAmateursOriginalMusic]

Is it just me, but I find myself more interested in Martins hair!🤣 Im sure it was grey at one point, then he was bald, then he had loads of hair, now it’s receding faster than a (add humour)🤦‍♂️🤣🤣

[@roblough3314]

The harbinger of doom strikes again. It’s amazing this bloke is still allowed on TV.

[@patrikfloding7985]

Guess you’re all right then, Jack?

[@crazyjay7676]

It is time for change vote labour

[@MinkieWinkle]

You honestly think there is a difference between them. They both need to go. Time for real change, time for reform

[@StevenHaggis]

I don't trust him!!!!!

[@JS-gr4pq]

Ofgem = toothless tiger!!!