The energy price cap will hit £1,928 from October, the second highest level on record. That is the number that matters, not the press release. Ofgem’s announcement of a “transformation” to strengthen consumer protections is welcome in theory, but for the 28 million households on standard variable tariffs, the real question is whether it will make their bills lower or their homes warmer.
As reported by GOV.UK, Ofgem will gain new powers to force suppliers to compensate customers automatically when they fail on service standards, think missed meter readings or delayed connections. It will also ban the installation of prepayment meters in vulnerable households without a warrant. These are concrete steps. But they are steps around the edge of a much larger problem.
What the reforms actually change
The package includes a faster switching service, down from 21 days to 24 hours for most customers, and a requirement for suppliers to offer debt repayment plans before disconnecting. Ofgem says it will also be able to fine suppliers up to 10% of their annual turnover for systemic failures. That last figure sounds tough. But the typical fine under the current regime has been around £2m, a rounding error for a company like British Gas, which reported £750m operating profit last year.
The ban on forced prepayment meters is the strongest measure here. Citizens Advice reported 3.2 million prepayment meter installations in 2022, many of them involuntary. The new rules require explicit consent from the household, and vulnerable customers, those on the Priority Services Register, cannot be switched at all. That is a genuine protection. But it does not lower the cost of the energy those meters measure.
Standing charges, the silent drain
What the reforms do not touch is the daily standing charge, which has risen 43% since 2021 to an average of 53p per day for electricity and 30p for gas. That is £303 a year before you turn on a single appliance. For a household using 12,000 kWh of gas and 2,900 kWh of electricity, the typical 3-bed semi, standing charges now account for about 18% of the total bill. Ofgem has the power to cap these charges but has chosen not to. The reason, it says, is that standing charges cover fixed network costs. But critics, including the Energy and Climate Intelligence Unit, argue that the current structure penalises low-users and incentivises suppliers to keep charges high.
For homeowners considering eco upgrades, this is a hidden tax. A heat pump or solar array reduces your variable usage, but the standing charge stays the same. The payback period on a £7,000 air-source heat pump (after the £5,000 Boiler Upgrade Scheme grant) is lengthened when you still have to pay £303 a year just to be connected. The government’s own analysis shows that the average household could save £300 a year with a heat pump and solar panels, but only if standing charges are reformed.
What this means for your EPC and upgrade plans
The reforms do not change the economics of energy efficiency. An EPC rating of D or E, where 60% of UK homes sit, costs an average of £200 more per year to heat than a C-rated home, according to the Energy Saving Trust. The cheapest fix is still loft insulation: £300-£400 for a typical semi, saving £150-£200 a year. Cavity wall insulation runs £2,000-£3,000 and saves £200-£300. These numbers are not affected by Ofgem’s new powers.
The catch is that grants for these measures are finite. The Great British Insulation Scheme has already closed to new applications in some regions. The Boiler Upgrade Scheme runs until 2028 but has a fixed budget. If you wait for Ofgem to fix standing charges, you may miss the window for subsidies that actually cut your bill.
What you should do now
Check your current standing charge. It is on page two of your bill, under “daily unit rates.” If it is above 55p for electricity, you can switch supplier, the new 24-hour switching rule makes that easier. Then book a free home energy assessment through the Energy Saving Trust or your local council. That will tell you which upgrades pay back fastest. Ofgem’s reforms are a step forward on service standards. But the fastest way to cut your energy bill is still to spend money on your home, not wait for the regulator to spend yours.
Frequently Asked Questions
The energy price cap will rise to £1,928 per year for a typical household on a standard variable tariff from October 2024. This is the second highest level on record, affecting 28 million UK households.
Ofgem's reforms focus on consumer protections like automatic compensation for poor service and faster switching, but they do not directly lower energy bills. The daily standing charge, which averages £303 per year for electricity and gas, remains unchanged, meaning your fixed costs stay high regardless of energy use.
The average daily standing charge is 53p for electricity and 30p for gas, totalling about £303 per year. This has risen 43% since 2021 and accounts for roughly 18% of a typical 3-bed semi-detached home's total energy bill.
The standing charge adds about £303 per year to your bill, even after installing a heat pump, which extends the payback period. After the £5,000 Boiler Upgrade Scheme grant, a £7,000 air-source heat pump saves around £300 annually with solar panels, but only if standing charges are reformed, otherwise your fixed costs remain high.
Yes, Ofgem gains new powers to force suppliers to automatically compensate customers for failures like missed meter readings or delayed connections. However, typical fines under the current system have been around £2 million, which is small for large suppliers like British Gas with £750m operating profit.
