Gas prices have peaked and the price cap has come down but higher daily standing charges and increased food and housing costs are adding pressure to household finances.
However, with energy bills still far above pre-crisis levels at a time when housing and food costs are rising, the financial constraints on households are considerable.Not only do they spend a larger proportion of their disposable income on essentials, like energy and food, but the composition of the price cap also hurts them disproportionately.
That is because, although unit prices for gas and electricity have come down, the daily standing charge that customers pay has been rising.This is the fixed cost that customers pay to have their homes connected to the grid. These costs have climbed over the last few years, partly because they also include supplier failure costs - around 30 suppliers have gone bust since energy prices started to rise in 2021.Even those that use very little gas and electricity will have to pay it, meaning the system disproportionately benefits wealthier families with bigger homes.
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