A standing charge is a cost that will be shown on your energy bill. It’s a fixed daily amount that customers have to pay, no matter how much gas and electricity they use. Each energy supplier sets its own standing charge for each tariff it offers. It’s sometimes called a ‘daily unit rate’.
You’ll have to pay the standing charge even if you use zero gas and electricity.
As well as a standing charge, energy customers will also pay a ‘unit rate’ per kilowatt hour (kWH) of gas or electricity used.
What does the standing charge cover?
You’ll normally pay standing charges if you have a:
- post-pay energy meter
- prepayment energy meter
- Economy 7 or Economy 10 energy meter
The standing charge pays for:
- the cost of physically supplying gas and electricity to your home
- keeping your home connected to the energy network
- having your gas and electricity meters read by your energy company
- energy network maintenance
- government initiatives aimed at helping vulnerable homes
- government initiatives to reduce carbon emissions
Related: Switch & Save Using Our Energy Comparison Service
How much is a typical standing charge?
Typical standing charges for domestic energy customers are as below:
- between 5p and 60p per day for electricity
- between 10p and 80p per day for gas
Business energy customers may pay different standing charges.
Do all energy suppliers levy a standing charge?
In the past, energy regulator Ofgem required every energy tariff to include a standing charge, even if the stated standing charge was zero.
The idea was to make all energy plans follow the same price structure so it was easier for consumers to compare energy tariffs.
This rule was dropped however, and energy suppliers are no longer required to set standing charges on energy bills.
Now, most, but not all, energy tariffs carry a standing charge.
Should I choose an energy tariff without a standing charge?
A small number of energy tariffs have a zero standing charge.
Opting for an energy tariff without a standing charge might seem a good money-saving strategy.
However, it rarely is because tariffs without standing charges tend to charge higher unit rates. This means that by choosing an energy tariff without a standing charge, but high unit rates, you could end up overpaying for your energy.
The main exception to this is if you have a second home that is rarely occupied. If you have a tariff with a standing charge you could be overpaying for energy. If you have a tariff without a standing charge, you’ll only pay for the energy you use.
Businesses that only operate for part of the year could also benefit from a tariff without a standing charge, and only pay for the energy used.
Choosing an energy tariff
Standing charges are not the only factor to consider when choosing an energy tariff. You’ll need to consider unit charges too.
But you don’t have to do the calculations yourself. You can work out the best energy tariff for your household by comparing tariffs offered by different suppliers.
An energy comparison will take into account both standing charges and unit charges, as well as how much energy your household typically uses in a year and make the total costs easy to compare.
