Energy standing charges: what are they and could you pay less?

Daily standing charges for energy use have been in the news recently, as the energy regulator Ofgem will soon require suppliers to offer tariffs with lower standing charges.

At the moment, energy customers paying by direct debt for an average price-capped tariff have standing charges of 53.68p per day for electricity, and 34.03p per day for gas. For a household using both fuels, that amounts to around £320 per year.

Ofgem has proposed that all energy suppliers in Great Britain should have to offer at least one lower standing charge tariff by the end of January 2026. It says the daily charges for these tariffs should be lower by at least £150 less per year.

These tariffs would be available to all customers regardless of how they pay for their energy, whether that’s by direct debit, prepayment or when they receive their bill. But the money will be made back in higher unit rates, so these new tariffs won't suit everyone.

Here's what you need to know.  

Or head straight to how to get the best energy deal for the latest cheapest energy prices

What are energy standing charges?

Standing charges are fixed daily costs that form part of your energy bill. They are unaffected by how much energy you use.

The price you pay for your energy is made up of two elements:

• Unit rate – the cost per unit (kWh) of energy you use. The amount you pay goes up or down depending on your energy usage.
• Standing charge – the cost per day to cover the fixed costs involved in supplying your energy. The amount you pay stays the same regardless of your energy usage.

For homes that use both electricity and gas, these rates will be different for each fuel. You should be able to see a breakdown of your energy costs in your online account or on your statements.

What do standing charges pay for?

Standing charges cover a range of fixed costs. These include the cost of physically getting electricity and gas to your home through cables and pipes, including maintenance of the network and infrastructure upgrades. They also cover certain business costs, such as carrying out in-person meter readings and repairs.

Standing charges also include payments towards social and environmental government schemes, such as the Warm Home Discount and smart meter roll out, and the costs resulting from suppliers going out of business.

How has the level of energy standing charges changed? 

Standing charges for electricity have increased in recent years as the fixed costs to suppliers have risen.

They rose significantly in 2022 and 2023 due to measures introduced by Ofgem to make the distribution of electricity network charges fairer among energy customers. High inflation and the number of suppliers going bust following the energy crisis has also been a factor.

On the other hand, gas standing charges haven’t risen as much in comparison, while unit prices have risen more.  

In October 2019, standing charges were 23.51p per day for electricity and 26.71p for gas, which means that in the last six years they’ve increased by 128% for electricity but just 27% for gas. 

This compares to a 48% rise in electricity unit rates and a 71% rise in gas rates, which in October 2019 were 17.85p and 3.68p per kWh respectively.

There is generally a trade-off between standing charges and unit rates, so if standing charges go down, unit rates go up, and vice versa.

How do standing charges affect your bills?

As the amount of energy you use has no impact on the standing charges you pay, low and high users in the same region pay exactly the same. This means standing charges are a bigger proportion of your bill if you’re a low user than if you’re a high one, as the graphic below shows.

That means that standing charges have a bigger impact on the bills of lower income households and those who have cut their energy usage.

Ofgem's proposed low standing charge tariffs

In September 2025, Ofgem announced plans to give energy customers more choice over how they pay for their energy costs by making it a requirement for all energy suppliers to offer at least one tariff with lower standing charges. These are expected to be in place from January 2026 onwards.

Ofgem had previously considered requiring a zero standing charge option, but this approach was scrapped after suppliers raised concerns that it would be too complex and costly to put in place.

It's important to note that, in its announcement, Ofgem made it clear that the fixed costs standing charges pay for can’t be removed but they can be shifted from one part of a customer’s bill to another – their unit rates. 

In other words, the tariffs with lower standing charges will have higher unit rates than those with 'normal' standing charges. That means that if your household does not have very low energy use, the new tariffs will not be cost effective for you.

Who could benefit from the changes?

The new tariffs are only likely to save you money if your energy consumption is low. That's because you’ll pay higher unit rates than those on regular tariffs. Therefore, most households won’t save money.

It’s important to consider your energy use and circumstances carefully before deciding to switch to one of these tariffs. Look at how much energy you are expected to use over a 12-month period, and whether the higher unit costs will negate any savings made by a lower daily standing charge.

Which suppliers offer no or low standing charge tariffs already?

There are a handful of suppliers that already offer zero or low standing charge options.

Utilita has a tariff with no standing charges for prepayment customers, while prepayment energy supplier E Energy has no standing charges for customers with smart meters. With both you pay a much higher unit rate for the first 2kWh of gas or electricity you use each day.

As you pay nothing on days when you don’t use any energy, you could save money if there are a significant number of days each year when this is the case – your property is left empty for periods of time, for example.

EDF Energy’s Simply Tracker tariff gives you £25 off your annual standing charge for each fuel type until January 2027, so you would pay £270 a year in standing charges instead of £320 for both fuels at the average price cap rate until the end of December if you pay by direct debit or prepayment. However, your rates go up and down with the price cap.

You should look at how much your whole bill is likely to be when deciding whether these tariffs are right for you.

How can you make sure you’re getting the best deal for you?

To find the tariff that will suit you best, use our free energy comparison service or another comparison site to compare deals. The more accurately you enter your typical usage, the more accurate the potential savings displayed will be.

When considering a zero or no standing charge tariff, or any other type of tariff, you should think about how you use your energy to work out whether it’s likely to save you money.

Visit our guide to how to get the best energy deal for more.