Understanding Low and No Standing Charge Energy Tariffs

Standing charges have become one of the most controversial parts of UK energy bills. Even households that use very little gas or electricity can still face high annual costs simply for being connected to the energy network.

In recent years, standing charges have risen sharply and now make up a significant proportion of the average household energy bill. Many energy users have found that these fixed costs reduce the impact of cutting back on usage, particularly for households trying to manage rising energy costs.

While proposals for low or no standing charge energy tariffs have been discussed within the UK energy market, many households remain unsure how these tariffs work, who they are suitable for, and whether switching would actually reduce bills.

What is a standing charge on energy bills?

A standing charge is a fixed daily cost that energy providers charge customers for having a gas or electricity supply. This charge applies every day, regardless of the amount of energy used.

What does the standing charge pay for?

Standing charges are intended to cover costs that do not depend on day-to-day energy use, including:

• Maintenance of gas and electricity networks
• Meter installation, including traditional and smart meters
• Billing systems and customer service operations
• Government and environmental scheme costs

These costs apply whether a household uses a lot of energy or very little, which is why standing charges are paid even when no energy is consumed.

Standing charges vs unit rates

Energy bills are made up of two main components:

For households with low energy use, standing charges can make up a large share of total energy costs.

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How much do standing charges cost in the UK?

Standing charges vary by region, fuel type, and payment method, including whether a customer pays by Direct Debit or uses a prepayment meter. However, for standard variable tariffs, these charges sit within limits set by the existing price cap.

Annual cost of standing charges

Figures discussed publicly indicate that standing charges add over £300 per year to the average dual-fuel household energy bill. This cost applies regardless of the amount of energy actually used.

In December 2025, the UK Government announced that standing charges could fall by around £39 per year on average, which was described as a modest reduction rather than a structural change.

Why standing charges have increased

Standing charges rose significantly following the energy crisis, as energy providers were allowed to recover more fixed costs through daily charges instead of unit rates. This has resulted in higher standing charges becoming a permanent feature of many household bills.

Why are standing charges so controversial?

Standing charges are controversial because they affect households differently, depending on their energy use.

Why low-usage households are hit hardest

Households that use less energy still pay the same daily standing charge as high-usage households. This means:

• Single-occupancy homes
• Older people living alone
• Small flats and energy-efficient properties
• Second homes or rarely used properties

can face higher bills relative to the amount of energy they consume.

Do standing charges discourage energy saving?

Because standing charges are fixed, reducing energy use does not reduce this part of the bill. Many energy users feel this weakens incentives to lower consumption, even though reducing energy use is often encouraged.

What are low or no standing charge energy tariffs?

Low and no standing charge tariffs aim to reduce or remove the fixed daily cost, but this is usually balanced by higher unit rates.

How low standing charge tariffs work

Low standing charge tariffs reduce the daily charge but increase the cost per kWh. This means households pay less for being connected but more for each unit of energy used.

How no standing charge tariffs work

No standing charge tariffs remove the daily charge entirely. However, these tariffs usually come with much higher unit rates, meaning costs can rise quickly if energy use increases.

What has Ofgem said about standing charges?

The energy regulator has acknowledged widespread concern about standing charges and their impact on household bills.

Ofgem’s proposal and consultation process

In December 2024, ofgem’s proposal was to require energy providers to offer a low or no standing charge tariff that would sit within the Energy Price Cap.

Why plans changed

By mid-2025, Ofgem stated that low standing charge tariffs were likely to sit outside the existing price cap. This raised concerns because:

• Unit rates would not be capped
• Energy providers could offset lower standing charges with higher usage costs

Current position

As of January 2026, low or no standing charge tariffs have not been introduced across the energy market. Ofgem has said further analysis is needed to ensure any changes protect consumers.

Who benefits most from low standing charge tariffs?

Low standing charge tariffs can benefit some households, depending on how much energy they use.

Low-usage households

Households with consistently low energy use may benefit most, particularly where standing charges make up a large part of annual energy costs.

Single-occupancy homes

People living alone often use a smaller amount of energy and may benefit if usage remains low year-round.

Second homes and occasional-use properties

Homes that are only used part of the year may benefit from lower standing charges, provided energy use stays minimal.

Which UK energy suppliers offer no standing charge tariffs?

At present, no major UK energy providers consistently offer mainstream domestic tariffs with zero standing charges across all regions and payment types.

Some niche or specialist tariffs have removed standing charges in the past, but these are typically limited in availability and paired with much higher unit rates.

Why no standing charge tariffs are rare

Most suppliers recover unavoidable fixed costs through standing charges. Removing them entirely means those costs must be recovered elsewhere, usually through higher unit rates.

This often results in:

• Higher energy costs for most households
• Tariffs that only suit extremely low usage
• Limited availability across the energy market

Review your options before your next energy bill arrives.

When might a low standing charge tariff not be a good idea?

Low standing charge tariffs are not suitable for every household.

High-usage households

Households that use a large amount of energy, such as families or larger homes, often benefit more from lower unit rates than reduced standing charges.

Impact of seasonal energy use

During colder months, higher unit rates can significantly increase bills, especially for homes with high heating demand.

Can you save money with a low standing charge if you use a lot of energy?

In most cases, households that use a lot of energy are unlikely to save money with a low standing charge tariff.

Why higher usage changes the maths

Low standing charge tariffs recover costs by charging more per kWh. For households with higher energy use, these higher rates can outweigh any savings from reduced standing charges.

This can affect:

• Larger families
• Homes with electric vehicles or heat pumps
• Properties with consistently high energy use

See how your current tariff compares to today’s energy prices.

Standing charge vs unit rate: how the trade-off works

Can you avoid standing charges altogether?

Are no standing charge tariffs widely available?

No standing charge tariffs are limited and not consistently available across all regions or payment methods, including prepayment meters.

Why “no standing charge” does not always mean cheaper

Removing the standing charge shifts costs into unit rates. For households using more than a minimal amount of energy, this can result in higher total energy costs.

Should you switch to a low standing charge energy tariff?

Switching should always be based on real usage data, rather than headline claims.

What to check before switching

• Your annual energy use
• How much of your bill comes from standing charges
• Whether a fixed rate tariff or standard variable tariff suits your usage pattern

This is where it can help to compare energy prices rates side by side to understand the real impact on your bills.

Check whether a low standing charge tariff could suit your household.

How to compare tariffs properly

Looking only at standing charges can be misleading.

What matters most

• Total annual energy costs based on usage
• Unit rates during high-demand periods
• Meter type, including smart meters
• Payment method and regional pricing

Compare energy prices to see what you could be paying instead.

Correct as of 02 February 2026

FAQ’ About Low and No Standing Charge Tariffs