Energy standing charges explained

Key takeaways

• A standing charge is a fixed daily fee on your energy bill (separate for electricity and gas) which covers costs for maintaining the energy network, meter readings, renewable energy investments, and government programs.

• Standing charge rates are set by energy suppliers but regulated by Ofgem to ensure fairness, these vary by location, tariff, and supplier.

• Charges accumulate even if no energy is used, however, there are possible exceptions for temporarily unoccupied properties or long-term empty properties by removing the meter.

• The average standing charge is now 53.68p per day for electricity and 34.03p per day for gas, under the current energy price cap (1 October – 31 December 2025)

What is a standing charge?

Your monthly energy bill is made up of the amount of gas and electricity you use plus a fixed daily charge, known as a standing charge. There are separate electricity standing charges and gas standing charges.

This fee is akin to a service charge, covering the costs associated with keeping your property connected to the energy network.

Regardless of how much energy you consume, the standing charge remains a fixed cost, listed on your bill as 'daily unit rates'.

Think of it as the energy equivalent of a telephone line rental – it's there to ensure the infrastructure and services that deliver energy to your home are maintained and operational.

How is the standing charge calculated?

The standing charge is calculated to cover:

• Maintenance of the UK's vast network of energy pipes and wires

• The cost of meter readings

• Investments in renewable energy sources

• Government programs aimed at helping vulnerable households

Your energy supplier sets the daily rate based on factors like your location, the energy tariff you're on, and their need to turn a profit. Although energy suppliers have the autonomy to set their charges, they are regulated by Ofgem, which ensures that charges remain within reasonable limits.

Does Ofgem set standing charges?

Standing charges are set by your supplier - not Ofgem.

How much will you pay?

The standing charge on your bill can vary depending on several factors, including your energy supplier, the tariff you're on, and where you live.

For a ballpark figure, from 1 October to 31 December 2025, the average standing charge cap is 53.68p per day for electricity and 34.03p per day for gas for those on standard variable tariffs paying by Direct Debit.
This is due to the energy price cap.

However, these rates can differ significantly by region, payment method, and the type of meter you have, so it's best to get in touch with your supplier for the most accurate information.

Can I avoid paying standing charges?

The short answer is no; standing charges are a legal requirement as part of your energy contract.

However, there are exceptions. If you own a property that's temporarily unoccupied, you might be able to negotiate with your supplier to avoid the charge.

For properties that are empty in the long term, removing the meter entirely is an option, although it comes with its own costs.

Some suppliers may offer tariffs without standing charges, but these are few and far between and typically compensated for with higher per-unit energy costs.

Generally, unless your property is frequently unoccupied, a tariff that includes a low standing charge is often more economical.

Will standing charges go down?

Ofgem is working to cut standing charges for consumers. In 2023, the regulator reviewed standing charges and published guidance for suppliers for how to reduce standing charges for households, including moving some charges over to the unit rate or increasing 'the range of standing charges offered by suppliers.'

We think that there is an overall benefit from the changes discussed in this paper, but some consumers’ bills would increase. We are working together with government on how the impact on households in the domestic retail market could be reduced.

Ofgem - Source: Standing charges: domestic retail options

The energy price cap and fluctuating prices of standing charges

Why do standing charge costs fluctuate? Several reasons:

• The costs of maintaining and supplying energy to your home can change.

• Energy suppliers may adjust their charges to remain competitive or to reflect their financial goals.

Additionally, broader market shifts, such as the need to cover the expenses of failed energy suppliers or the expansion of government schemes like the Warm Home Discount, can lead to changes in the standing charges.

The role of prepayment meters

Standing charges are applicable whether you have a traditional meter, a prepayment meter, or a smart meter.

Smart meters often come with the perk of potentially lower standing charges due to reduced administrative costs for readings. Plus, you can monitor your standing charge directly on your in-home display.

Prepayment meters are where you pay in advance for your energy and then top-up as you go. Standing charges will still eat into your credit even if you don’t use any energy.

If you don't use gas during the summer, for instance, the standing charge will accumulate and be deducted from your credit when you next top up.

Dual fuel and standing charges

For homes with both gas and electricity, separate standing charges for each are a reality. These charges are listed as daily rates on your dual fuel bill - one electricity standing charge, and one gas standing charge. Both can vary by network and location, often being higher in rural areas.

Do all suppliers require a standing charge be paid?

While it's true that a handful of suppliers offer tariffs without standing charges, these options are not common and can be ephemeral.

For instance, Utilita is known for not imposing a standing charge, but most major suppliers, seldom provide such tariffs.

What are the benefits of tariffs with no standing charges?

Tariffs without standing charges have their appeal, particularly for properties that aren't in use all year round, like holiday homes.

You pay solely for the energy you consume, which can be cost-effective under these circumstances. However, it's important to note that these tariffs often come with higher energy unit rates.

To determine the most cost-effective tariff for your needs, you should consider your typical monthly energy usage.

For the majority of households, especially those with medium to high energy consumption, opting for a tariff with a low standing charge will likely be more beneficial than one without any standing charge at all.

In the end, while the standing charge may seem like a small part of your energy bill, it plays a significant role in the broader energy ecosystem.

By understanding what it is, how it's calculated, and how it affects your overall energy costs, you can make more informed decisions about your energy usage and the best tariff for your household.

Remember, the standing charge is there to ensure that when you flick that switch, the lights come on – and that's a service worth paying for.