1<\/p>\n Ofgem is launching a consultation into energy pricing to help poorer householdsCredit: EPA<\/p>\n The regulator is also asking people around the country to give their views on how energy costs are shared.<\/p>\n “We want to make sure energy system costs<\/a> are shared fairly and transparently – so we\u2019re launching a review of all the costs that make up bills, looking at whether there are better ways to do this,” Ofgem posted to its official X account.<\/p>\n It said the energy pricing system<\/a> needed to be updated in line with how households’ energy use has changed.<\/p>\n For example, many people are now using new technology such as smart meters<\/a> to shift their energy usage to different times of the day. <\/p>\n Some households are also using more energy than in previous years, it pointed out, thanks to the rise of electric cars<\/a> and heat pumps.<\/p>\n As part of the review, standing charges<\/a> – fixed daily fees added bills by energy suppliers – could also be overhauled, as Ofgem said many consumers had complained the current system was “unfair”.<\/p>\n Ofgem boss Jonathan Brearley said:\u00a0\u201cAs we transition to a more secure, homegrown, renewables-based energy system, unit costs may decrease due to reduced reliance on expensive and volatile gas.<\/p>\n “However, fixed costs<\/a> \u2013 such as those needed to upgrade the energy network to deliver cleaner and more secure power to our homes \u2013 could rise.<\/p>\n “This shift in the make-up of system costs means we need to review how we pay for energy and carefully consider how these costs are distributed.\u00a0\u00a0<\/p>\n \u201cWe know customers have real concerns about fairness and transparency in their bills, especially around fixed costs. That\u2019s why we\u2019re asking big questions about how and where these costs are shared \u2013 and whether there are better, fairer ways to do it.\u00a0\u00a0<\/p>\n Stop Making This Air Conditioning Mistake: How to Slash Your Summer Energy Bill<\/p>\n \u201cThe launch of this review is the next step in developing fairer pricing for a changing energy system, ensuring more choice for consumers while protecting those most in need.\u201d\u00a0\u00a0<\/p>\n Ofgem said it was only seeking views at this stage and was not giving any recommendations.<\/p>\n Currently, energy prices are made up of unit rates<\/a> and daily standing charges.<\/p>\n Your unit rate tells you how much you pay for every kilowatt-hour (kWh) of electricity and gas you use, while your standing charge covers the cost of supplying your electricity and gas supply to your home.<\/p>\n The review was welcomed by some experts, who said there was a “clear need” to review how households pay for their energy.<\/p>\n USwitch director of regulation Richard Neudegg said:\u00a0\u201cThe energy system is changing rapidly as we use more and more clean power, so the way we pay for it needs to change as well.\u00a0<\/p>\n \u201cThere is a clear need to look at how pricing and the price cap works<\/a>.<\/p>\n \u201cAs part of our move towards Clean Power 2030, it\u2019s vital to ensure consumers get real rewards for managing their consumption, ensuring standing charges are reasonable, as well as securing support for the vulnerable.<\/p>\n \u201cThese goals could be achieved within tariffs that consumers choose to be on, considering how the price cap itself works<\/a>, and or through various support and grant schemes.\u00a0<\/p>\n “There are no firm proposals from\u00a0Ofgem\u00a0on particular shifts to pricing approaches yet, but it is good to see the regulator opening up the thinking on how this could best work.\u201d<\/p>\n However, others argued the plans don’t go far enough to protect vulnerable families. <\/p>\n Heat Trust boss, Stephen Knight, said: \u201cForthcoming regulation of\u00a0heat\u00a0networks is great news for consumers, but\u00a0Ofgem\u2019s proposals around price regulation do not yet deliver the level of fairness or price protection that\u00a0heat\u00a0network customers deserve.<\/p>\n “Many households are still paying twice as much for\u00a0heat\u00a0as those using gas boilers<\/a> \u2013 and that simply isn\u2019t sustainable.<\/p>\n \u201cWe need urgent action from government to rein in unregulated costs and reduce unacceptable levels of\u00a0heat\u00a0loss from poorly performing systems.<\/p>\n \u201cUnless these issues are addressed, we risk undermining public confidence in\u00a0heat\u00a0networks at a time when they need to be a key part of our low carbon future.\u201d<\/p>\n He added: \u201cWe urge government to go further than these proposals, engage more closely with consumers and their representatives and deliver the strong, enforceable protections that\u00a0heat\u00a0network users urgently need.\u201d<\/p>\n Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk<\/a>.<\/p>\n![\"Smartphone](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/07\/announced-price-cap-amount-suppliers-799041931.jpg\")
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