'Slash energy standing charges ahead of cutting energy VAT!' – that's the big message to the Government from a poll of over 60,000 people
There are rumours the Government is planning to cut 5% VAT on energy bills in the upcoming Budget. Yet according to a poll of over 63,000 social media users by Martin Lewis, instead of cutting VAT, people would prefer the funds this tax generates be used to slash energy standing charges. Of those who expressed a preference, five times as many would prefer cutting £320 a year standing charges to VAT.
Cutting the 5% VAT on energy should reduce everyone's bills, but crucially it means those who have the biggest bills would see the greatest savings. MoneySavingExpert.com founder Martin Lewis posted his thoughts on social media earlier this week, stating:
Interesting to read there are rumours of getting rid of the 5% VAT on domestic energy bills. This would of course cut people's costs. Yet it would, in cash terms, benefit higher users more, they are often (though not always) higher earners.
I wonder if other methods, for example, the Government using the funds from energy VAT to reduce standing charges (which, disproportionately impacts lower uses) may be more efficient?
Full poll results
Martin's post received a huge number of replies so, on the back of it, he launched a poll across a number of different social media platforms. This resulted in a huge vote:
Note that you could only select one option, percentages have been rounded to the nearest whole number so may not add up to 100% and the totals are weighted by votes per platform.
Martin also notes that, as it is social media polling, this isn't a statistically relevant random sample. But given that the same result was dominant across all platforms, even though they can lean in different political directions, it looks to be a good starting point for the nation's view – one that merits more authoritative polling.
Martin: 'I'm not surprised by these results'
Standing charges are a £320 a year poll tax on energy bills, a moral hazard disincentivising lower users from cutting their bills. They also punish customers that only use gas for central heating in winter, many of whom are elderly, by making them pay for every day in summer. It's by far the biggest single subject of complaint I get from the public about energy bills.
So I wasn't surprised to see the poll results. I will make sure senior members of the Government are aware of this and suggest they do further research on this option if, as it is hoped, they are looking for ways to reduce bills.
Update, Mon 22 Sep 2025: Could standing charges be lowered in the Budget?
Citing the results of Martin's poll, a report in The i Paper on Sunday 21 September said that the Chancellor Rachel Reeves is now considering cutting standing charges as one potential option to reduce household energy bills.
Reacting to this update on X, Martin said he wondered if his polling had something to do with it, as he had sent the results to high up members of the Government last week. Martin added that he was "glad to see the Government may be listening" and noted that "there's an outside chance" we could see lower standing charges as part of the Budget on Wednesday 26 November.
How energy standing charges currently work
Standing charges are the daily fixed costs you pay for having access to gas and electricity, even if you don't use any. Under the current Energy Price Cap, the average household paying by Direct Debit is charged 51p a day for electricity and 30p a day for gas, rising to 54p a day and 34p a day respectively from Wednesday 1 October (though the charges can vary hugely by region).
We have long called for these charges to be lowered, arguing that they unfairly penalise households on lower incomes and those looking to cut their usage. Industry regulator Ofgem is currently consulting on new rules, partly based on our suggestions, which would require suppliers to offer a 'low or no standing charge' option.
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