No Standing Charge Energy Tariffs: What You Need to Know

No standing charge energy tariffs are often promoted as a way to reduce energy bills by removing the daily standing charge normally included in electricity tariffs and gas tariffs. Instead of paying a fixed amount every day, customers only pay for the energy they use.

At first glance this may seem like a better deal. However, these tariffs can include hidden costs because suppliers still need to recover the costs of maintaining the UK’s energy network and operating the wider energy supply system.

To cover these costs, energy providers usually increase the unit cost of electricity and gas. This means households that use more energy may end up paying more overall, even though the daily standing charge has been removed.

Understanding how these tariffs work can help households make informed decisions when comparing energy plans and deciding whether to compare energy prices to find a better energy deal.

You can compare energy prices to see how standing charges and unit rates vary between suppliers.

How No Standing Charge Tariffs Work

Most electricity tariffs in the UK include two main parts:

The standing charge helps energy providers cover the cost of maintaining the infrastructure required to deliver electricity and gas to homes.

These costs include:

• maintaining the national energy network and local distribution systems
• operating billing and customer service systems
• installing and maintaining meters and smart meters
• managing supplier operations within the wider energy market

With a no standing charge tariff, these costs still exist. Instead of charging a daily fee, suppliers incorporate them into the unit cost of energy.

This means households may notice:

• higher prices per unit of energy used
• higher costs for households with greater energy use
• increased energy bills during colder months when heating demand rises

Why Unit Rates Are Higher on No Standing Charge Tariffs

Energy suppliers must recover the same costs regardless of how tariffs are structured.

When the standing charge is removed, those costs are usually redistributed into the unit rate for electricity and gas.

This means customers effectively pay for the infrastructure through their energy usage rather than through a fixed daily fee.

Example tariff comparison

Because of this structure, the main advantage of removing the standing charge may only apply to households that use very small amounts of electricity or gas.

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Who Pays More With No Standing Charge Tariffs?

The impact of these tariffs depends largely on how much energy a household uses.

High energy users

Households that consume a significant amount of electricity or gas may pay more overall because of the higher unit rate.

Examples include:

• larger households
• homes with electric heating
• properties using a large amount of gas for central heating

Dual fuel households

Customers using both gas and electricity may see higher costs because both fuels are charged at higher unit rates.

Prepayment meter customers

Many customers with a prepayment meter already pay higher unit rates than direct debit customers. Removing the standing charge can increase those costs further.

Before switching tariffs, it may help to compare energy deals to understand the total cost of each option.

When No Standing Charge Tariffs May Work

Although these tariffs can increase costs for some households, they can still benefit certain types of properties.

Low energy users

Households that use very little electricity or gas may benefit because they avoid the daily standing charge.

Empty properties

Homes left empty for long periods may have extremely low energy consumption.

Holiday homes

Properties used only part of the year may also benefit if overall energy use remains very low.

However, even these households may experience higher costs during winter months when heating and electricity use increase.

What Energy Suppliers and Regulators Say

Energy regulators and industry organisations have warned that removing standing charges does not remove the underlying costs of supplying energy.

Industry groups such as Energy UK have explained that shifting costs from standing charges to unit rates simply redistributes the same expenses.

This means households that use more energy may end up paying a larger share of the overall cost of maintaining the energy system.

The energy regulator Ofgem has also reviewed proposals for alternative pricing structures, including tariffs with lower or zero standing charges.

However, regulators have emphasised the importance of ensuring consumers understand the potential impact on overall energy bills.

How to Compare No Standing Charge Energy Tariffs

When reviewing tariffs, it is important to consider the total cost of energy rather than focusing only on the daily charge.

Key factors to compare

Many households use an energy price comparison tool to review available tariffs and determine whether they can find a better deal.

Large suppliers such as British Gas and other providers may offer multiple available tariffs with different standing charge structures.

Because tariffs are structured differently, many households choose to compare energy tariffs before making a decision.

How the Ofgem Price Cap Affects Standing Charges

The Ofgem energy price cap sets limits on the maximum amount suppliers can charge customers on standard variable tariffs.

The cap includes limits on both:

• the daily standing charge
• the unit price of electricity and gas

The price cap is reviewed four times each year, usually in:

• January
• April
• July
• October

Although suppliers cannot exceed the cap for standard tariffs, they may still offer alternative pricing models such as low standing charge or zero standing charge tariffs.

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Last Updated 16 March 2026

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