Britons will pay £273 on energy bills before they even use any fuel, says Martin Lewis

·Breaking News Editor, Yahoo News UK
·4 min read
Money Saving Expert's Martin Lewis speaks to the media after a joint press conference with Facebook at the Facebook headquarters in London.
Money Saving Expert's Martin Lewis warned households will need to pay £273 in standing charges before using any energy. (PA)

Households in the UK will have to pay a £273 annual bill on their electricity and gas supply before they've even used any energy, Martin Lewis has said.

The Money Saving Expert warned of the rise in his weekly newsletter, which will be another increase facing families alongside the 80% rise in the energy price cap announced last week.

He said: "The daily standing charges that you pay just for having a bill rose hugely in April, and increased a touch more this time.

"If you have both gas and electricity, the average price cap standing charge is £273/year before you use owt.

"I have continually pushed back with Ofgem to try and get this changed, but with little success."

Read more: Food prices rising at fastest rate since 2008 as inflation surges

What is a standing charge?

A standing charge is a fixed cost that you have to pay no matter how much energy you use, to cover costs which energy providers incur to supply the gas and electric.

Your unit rate – the price-per-unit of the gas and electricity you use – is then paid on top of the standing charge.

Under the latest price cap increase, the daily standing charge for electricity has risen from 45.3p to 46.3p. The unit rate per kWh (kilowatt per hour) has then risen from 28.8p to 51.8p.

For gas, the daily standing charge was 27.2p, which has now increased to 28.4p. The unit rate per kWh was 7.4p, and has gone up to 14.8p.

Lewis has said these prices are dependent on the area where you live.

Read more: This is how much it will cost to use your household appliances under the new energy price cap

EMBARGOED TO 0001 MONDAY AUGUST 29 PICTURE POSED BY MODEL File photo dated 08/01/22 of a person holding an energy bill, as small businesses were owed almost �23,000 in late payments for a month, according to new data, adding to the sky-rocketing energy bills that are piling pressure on concerned business owners.
Bills are on the rise for families across the UK . (PA)

Watch: Martin Lewis brands energy price rise as 'irresponsible'

The financial expert last week offered a stark warning amid the cost of living crisis, warning of disastrous consequences if the government doesn't step in.

He told Good Morning Britain: “I’m not going to get too hung up into what the specific solutions are at the moment, because actually this isn’t about the mechanics, this is about the will.

“I hope and I pray whomever our new prime minister is, they have the will to do something.

"Because, if they don’t, people will die this winter due to these energy price hikes.”

Read more: UK energy price cap to rise 80% to £3,549 this October

(Yahoo News UK)
(Yahoo News UK)

Last week, regulator Ofgem confirmed an 80% rise in the energy price cap for around 24 million households in England, Scotland and Wales, sending the average household’s yearly bill from £1,971 to £3,549.

At the start of the year, the average bill was £1,277.

The cap will come into effect on October 1, but Ofgem has warned some suppliers could start to increase direct debits before then to spread costs.

It will remain in place until December 31, when it will be adjusted again, with forecasts suggesting bills could surge again to around £5,400 in January and around £7,000 in April.

With the price cap expected to rise even higher come January – amid record increases in global gas prices – there have been widespread calls for the incoming prime minister, Liz Truss or Rishi Sunak, to implement new support packages to help households facing a desperate struggle this winter.

The new prices are already having an impact, with debt help charity StepChange reporting a growing number of people falling into energy arrears.

StepChange said one in five (20%) clients who completed full debt advice in July said the cost of living was their primary reason for contacting StepChange, up from 18% in June.

It also said that the proportion of new clients in gas arrears rose from 23% in June to 26% in July, while the proportion of those in electricity arrears was up from 28% in June to 30% in July.