How Standing Charges Make Energy Prices Unfair Across The UK

Standing charges are a set fee that is added to every energy bill each day in the UK. People talk a lot about this cost in the UK energy market in 2025. No matter how much energy you use, you have to pay it each day. This happens even if your use is zero.

Ofgem says that now standing charges make up about 20% of the average dual fuel energy bill under the energy price cap. There is a big gap between regions in the UK. A typical household in North Wales or Northern Scotland will pay up to £100 more each year in these charges than a household in Southern England or London. The price cap affects how much everyone has to pay, but people in Scotland and Wales feel it more.

This change brings up big questions about fairness. It can be hard on homes that use very little energy. It also affects people who pay with a prepayment meter. It could hurt vulnerable households too. This is not good for them, and many people feel the same way. People want energy to be fair for all. If you have a prepayment meter or low usage, you may feel this the most.

Why Do Standing Charges Exist in the First Place?

Standing charges are set as a daily fee that you pay to your energy supplier. They help cover the basic cost of running the energy supply network. This charge pays for things like meter readings and customer service. It also helps keep your home connected to the grid.

Every home linked to the grid has to pay this charge. It does not matter if you use a lot of energy or just a little. The amount is not tied to how many kilowatt hours, or kWh, you use. Both homes that use less power and those that use more will pay the same standing charge.

Ofgem asks suppliers to show these charges clearly on every bill. You will see them near the unit rates for your electricity and gas.

Check your current daily standing charge on your bill or online account

Why Do Standing Charges Vary So Much Across the UK?

The reason standing charges are different in England, Scotland, and Wales is because of the costs to keep up the grid in each area. Every region has its own local distribution network operator, also called a DNO, that looks after the grid. In some places, it costs more to run the network. This can be because of how far apart things are, where people live, or the land in that area.

Key reasons for regional differences include:

• Older infrastructure: Northern Scotland needs more work and longer cables for the grid.
• Fewer customers: There are less people in rural areas to help pay for grid services.
• Colder climates: The cold puts more stress on heaters, so the grid needs more care.
• Urban efficiency: In places like London and the South East, lots of people use the grid, so costs are easier to share.

Scotland’s grid has its own set of needs and issues because it covers both urban and rural parts. Some areas need more work and care than others.

How Much Do Standing Charges Add to the Average UK Energy Bill?

The average annual standing charge for a dual-fuel home in 2025 is between £290 and £370. The cost changes based on where you live.

At the October to December 2025 Ofgem energy price cap, a typical household pays about £1,755 on a standard variable tariff. This is for people who use around 2,700 kWh of electricity and 11,500 kWh of gas in one year. The energy price cap helps set how much you pay for your energy price. A variable tariff can change from time to time under this price cap. This is what Ofgem does to make sure good energy prices.

About £1 out of every £5 in the total comes from set daily fees. This amount is not for energy use.

These differences show that homes with the same energy usage can end up paying £50 to £100 more or less each year. It just depends on where they live.

Are Standing Charges Fair for Low-Usage Households?

Standing charges can be very hard for people who do not use much energy. This includes pensioners, people living alone, and those in social housing. They often feel the cost more than others.

Even if people in Wales cut down their energy usage a lot, there is still a fixed daily charge they have to pay. In places in North Wales that cost more, this charge can add up to 60 to 70% of someone’s yearly bill, especially if the household does not use much energy.

Unlike other places, homes that use a lot of energy see less of their bill coming from standing charges. This is because most of what they pay comes from the unit rates, which means the cost for each kWh. So, in these high-usage homes, the kWh rates have a bigger effect on the total bill than the standing charges.

For example:

• A home that uses less energy, like 900 kwh of electricity and 3,000 kwh of gas, can have to pay £320 out of £550 each year just for the standing charges.
• A home with high energy use, like 5,000 kwh of electricity and 17,000 kwh of gas, could pay £350 out of £2,200 each year toward standing charges.

This problem is why many people, campaigners, and groups are telling Ofgem to look at how these costs get split up.

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Which UK Regions Pay the Highest Standing Charges?

From October to December 2025, these areas in Britain will have the highest daily standing charges.

Families living in Northern Scotland and North Wales still pay some of the highest energy bills in Britain. They often use the same or less energy than people who live in the south.

Compare regional tariffs to check if your standing charge is above average

How Does Ofgem Regulate Standing Charges?

The energy regulator Ofgem sets how much you have to pay for standing charges as part of the price cap. These rules are for default and standard variable tariffs. But energy suppliers can change these charges a little bit within the limits. This means there can be some small differences in what people pay.

The price cap covers both:

• Unit rate is what you pay for each kWh of energy you use.
• Standing charge is a fixed daily amount you pay just to be connected.

As of October 2025, typical capped rates are:

Ofgem looks at these caps every three months in January, April, July, and October. The next update will be in January 2026. It may show changes from network reform trials that test new standing charge tariff choices.

What Reforms Are Coming in 2026?

Ofgem and the Department for Energy Security and Net Zero are getting ready to change the way fixed costs work. They want the costs to be fair for everyone.

From January 2026:

• Every supplier must give at least one tariff in each area that has a low standing charge.
• Trials will start for split standing charge tariffs. This will show network and supply fees more clearly.
• A talk will look at ways that let people put more fixed costs into unit rates. This change could help homes with low use or vulnerable households.

Suppliers like British Gas and Octopus Energy are trying out low standing charge plans for people in vulnerable households and for those who use prepayment meters. Before you make a switch or look over your energy plan, it is good to compare energy prices on a comparison site. This can help you see how standing charges in your area will change your total energy bill.

Are Standing Charges Higher for Prepayment Meters?

Yes, in most cases, people who use prepayment have to pay higher standing charges than those who use direct debit.

This is because of costs A for running things and using meters. But, Ofgem has a plan for the years 2025 to 2026. The goal is to make standing charges the same for prepayment and direct debit under the price cap.

Even though the gap is now smaller, many homes using prepayment still find it hard to keep up with these costs. This is because they have less money to spend, and they top up at odd times.

What About Government Support Schemes?

Households that have to pay big energy bills and fixed charges can still get help from support schemes like:

• Warm Home Discount Scheme: There is a £150 discount for people who get low income or who need more help. This money can help you with the cost of keeping the place you live warm.
• Priority Services Register: People with health problems or who need help to get around can get free support. You just have to be on the list.
• Fuel vouchers and energy debt help: You can get help, like vouchers to pay fuel bills or help with any money you owe for the energy. Places such as Citizens Advice and local councils give this help.

The warm home discount scheme is there to help people like you keep up with energy costs.

These steps help for a short time. We need bigger changes over time to make costs more fair in all regions.

Could Zero Standing Charge Tariffs Work?

Some suppliers have brought in or tested plans with no standing charge or a low standing charge. With these plans, the fixed costs get added to higher unit rates. So, you only pay for the amount of energy that you use.

This is good for homes that do not use much energy, but it may not work for all. Families or places with high usage might end up paying more because the price of each unit of energy is higher.

These tariffs are a good option for people who spend a lot of time away from home or own a second home. But, they are not yet easy to get in all parts of the UK.

Regional Fairness: The Ongoing Debate

The energy market in Britain is still split by where people live. Folks in Wales, Scotland, and some areas in northern England have to pay higher standing charges. This is true even though the energy use for the people there is less than the UK average.

Campaigners want to change how network costs are shared. They say that people in the UK should all pay a fixed daily amount, no matter where they live. This means customers would pay the same set fee each day, instead of different fees by region.

Ofgem is looking at new ways that could help make things fair while also covering the real costs of keeping energy systems going in places far away from cities.

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How to Check and Compare Standing Charges by Region

1. Log into your online account, or look at your latest energy bill.
2. Look for the “Standing Charge” under the electricity and gas sections in your energy bill.
3. Find the daily rate, shown in pence per day, and then multiply it by 365. This gives you the yearly cost.
4. Take these numbers and compare them to the regional averages given above.

If you pay more than most people for your energy, you might want to look for a supplier that has a lower standing charge tariff. A different tariff with a cheaper standing charge can help you save money.

Compare standing charge tariffs available in your area

FAQs About Standing Charges and Regional Energy Prices