No Standing Charge vs Low Standing Charge Tariffs

Energy suppliers in the UK provide standing charge tariffs. This means customers pay a daily standing chargein addition to their unit rate for electricity and gas. Due to increasing energy costs, some suppliers now offer low standing charge tariffs and zero standing charge tariffs. These options shift more costs into the unit rates instead of having fixed fees.

No standing charge tariffs do not have a daily standing charge. This means customers only pay for the amount of energy they use. However, these tariffs often have a higher unit rate for each kilowatt hour (kWh) of gas or electricity.

Low standing charge tariffs lower the daily standing charge but still keep it in place. This gives you a lower unit rate compared to zero standing charge tariffs. It also offers savings when you compare it to standard tariffs.

Ofgem’s proposal wants to start more low standing charge energy deals. This will help make tariffs fairer for low energy users. At the same time, it will keep costs reasonable for those who use much energy.

How No Standing Charge and Low Standing Charge Tariffs Work

Most regular tariffs have a daily standing charge. This charge helps pay for the upkeep of the energy network and energy supply services. The standing charge covers several costs related to these services.

• Maintaining energy infrastructure (like taking care of the electricity grid).
• Costs of energy suppliers failing (such as supplier collapses like Bulb Energy).
• Metering services (which include smart meters and the upkeep of prepayment meters).

A zero standing charge tariffdoes not have a fixed fee. This means all costs are in the unit rate. A low standing charge tariff lowers the fixed fee. It also has a lower unit rate than zero standing charge plans.

Comparison of No Standing Charge vs. Low Standing Charge Tariffs

Key takeaway:

• People who use little energy can save money with no standing charge tariffs.
• Households that use more energy might choose low standing charge tariffs. This helps them avoid paying high unit costs.

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Who Benefits Most from Each Tariff?

✅   No Standing Charge Tariff is Best for:

• Low energy users– Households that use a small amount of electricity and gas.
• Second homes– Places that are empty for a long time.
• Prepayment meter users– People who want to manage their energy usage and stay away from fixed fees.

✅   Low Standing Charge Tariff is Best for:

• Medium energy users– These are people who want lower daily costs but prefer to stay away from higher unit rates.
• Households needing flexibility– This option is great for families unsure about their future energy usage.
• Customers looking for a balance– This works well for those who use a moderate amount of energy but want to control their costs.

Disadvantages of No Standing Charge and Low Standing Charge Tariffs

❌   No Standing Charge Tariff Disadvantages:

• Higher rates per unit can lead to larger bills for customers using much gas or electricity.
• Heating costs in winter can rise for homes that use more energy during the season.
• There are fewer energy providers offering this type of plan.

❌   Low Standing Charge Tariff Disadvantages:

• It is not always the cheapest choice, because standing charges still exist.
• Savings can vary and are based on energy consumption.
• Top energy suppliers like British Gas may not always offer it.

Impact on Energy Bills: No Standing Charge vs. Low Standing Charge

Prices are based on energy usage suggestions from Ofgem and are correct as of 21/02/2025. The information is taken from FreePriceCompare.com.

Key takeaway: No standing charge tariffs can help low-energy users save money, but households that use a lot of energy might end up paying more because of higher unit rates.

Which UK Energy Suppliers Offer These Tariffs?

Some energy providers have low standing charge tariffs. They also offer zero standing charge energy deals. These options are available under Ofgem’s energy price cap rules.

Energy Suppliers Offering Low Standing Charge Tariffs:

• British Gas– Has some of the lowest standing charge rates for electricity and gas.
• Octopus Energy– Gives flexible standing charge options.
• EDF Energy– Offers fixed and variable tariffs with lower daily charges.

Energy Suppliers Offering No Standing Charge Tariffs :

• Utilita Energy– Focuses on zero standing charge tariffs for prepayment meters.
• E.ON Next– Offers some no standing charge choices for electricity deals.
• Smaller providers– The options are based on your postcode and regional pricing.

Always use an energy comparison service. This helps you check the latest energy prices and deals available in your area.

What to Expect in 2025: Ofgem’s Energy Price Cap & Market Changes

January 2025 Energy Price Cap Update:

• Ofgem’s energy price cap will keep controlling unit rates and standing charges.
• They will look over the maximum price that suppliers can set for standard variable tariffs.

Next Winter (2025/26) & Beyond:

• More energy companies might start offering custom standing charge tariffs.
• Dynamic pricing models could help no standing charge plans become more competitive.

Keep an eye on Ofgem’s updates to find out how the price cap will change your energy bill.

FAQs About No Standing Charge vs. Low Standing Charge Tariffs

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