Standing Charge Reform and Zero Standing Charge Tariffs

The standing charge is the fixed daily fee on your energy bill, paid whether or not you switch anything on. For the October to December 2025 cap period, the average across England, Scotland and Wales was 54.75 pence a day for electricity and 35.09 pence a day for gas, including VAT at 5%¹. Across Great Britain, standing charges now average £309 a year, and they make up around 19% of the average household's bill².

Reform is now actively under way. Ofgem has consulted on requiring every supplier to offer a tariff with a standing charge priced £150 a year below the cap's nil-consumption level, and it is running a trial of a split standing charge that rewards households for using less electricity at peak times⁴. Neither change abolishes the charge, and both shift costs rather than remove them. This page sets out the current figures, what drives them, the rules that govern them, and what each reform would mean for low users, high users and prepayment households.

The capped daily rates as they stand

The headline rates are set by the price cap and change every quarter. For the October to December 2025 period, the electricity standing charge averaged 53.68 pence a day for a typical consumer on the standard variable tariff paying by Direct Debit, including VAT⁶. In the July 2025 change, Ofgem recorded the electricity standing charge falling by 2.4 pence a day (5%) and the gas standing charge falling broadly by 2.8 pence a day (9%), an annual reduction of £19, or 6%, for most households⁷.

The direction of travel has not always been downward. In April 2026, the combined dual-fuel standing charge for a typical Direct Debit customer was 86.30 pence a day, down 12.6% on the previous quarter³. Analysis published in May 2025 put the electricity standing charge at £219.42 a year and suggested that moving costs out of it would reduce that to £149.17 a year, a 32% reduction⁸. The same analysis noted that the charge had been rising steadily over the past few years as suppliers transferred more costs from unit rates to fixed daily charges⁹.

Genuine zero standing charge tariffs are a different matter. Which? reported in August 2022 that although some suppliers had previously offered £0 standing charges, these were no longer available in the current market¹⁰. The Energy Ombudsman's guidance is equally blunt: a few zero standing charge deals exist, but they are very rare and come with catches¹¹. The historical rise explains why the question of reform became urgent. Compared with winter 2021/22, the electricity standing charge was 113% higher by winter 2022/23 for Direct Debit customers¹², and compared with winter 2020/21, daily standing charges were up 8% for gas and 119% for electricity¹³.

What shapes the standing charge

A standing charge covers the fixed costs of supplying a home: transporting energy, administration, and government environmental and social schemes⁹. Energy UK's explainer adds the detail that electricity distribution rates are set 15 months in advance, based on the inflation rate at that time, which means the charge responds to cost pressures slowly and in steps rather than immediately¹⁴.

The recent growth has three identifiable causes. National Energy Action (NEA) attributes the rise to the cost of maintaining infrastructure and delivering UK Government obligated programmes, and, significantly, to the cost of transferring the customers of failed energy suppliers to new suppliers, alongside a conscious decision by Ofgem on how to pay for energy networks¹⁵. Energy UK's account is consistent: standing charges increased significantly during 2022 and 2023 as a result of the implementation of Ofgem's Targeted Charging Review and inflation¹⁴. The Targeted Charging Review changed how network costs are recovered, moving them away from demand-based charges and towards fixed daily charges.

The scale of the increases in 2023 illustrates the compounding effect. When cap changes took effect in April 2023, standing charges rose for almost everyone: 9.7% for dual fuel Direct Debit customers, 9.4% for Standard Credit customers and 7.8% for prepayment meter customers¹⁶. Because the charge is fixed per day rather than per unit, these increases fell on every household regardless of how much energy it used, which is the core fairness problem that reform attempts to address.

NEA has set out the reform options it sees: reflecting a customer's usage when recovering some of these charges, taking into account a customer's payment method, or even reflecting their income¹⁵. Each of those options moves the charge away from being a flat daily fee, and each creates its own winners and losers, which is why the reform debate has been slow.

Where you live changes what you pay

The standing charge varies by supplier, tariff and region⁹, and the regional differences are large. Households in north Wales and Merseyside pay almost £360 a year in standing charges alone, households in Yorkshire, north east England and southern Scotland pay over £333 a year, and households in London pay £267, against a GB average of £309². The same regional pattern was reported in August 2026, with customers in Merseyside and North Wales paying significantly more than those in London¹⁷. At the daily level, the electricity standing charge in Southern Scotland can be 54.25 pence a day where other regions pay less¹⁸.

The reason for these differences is historical. Energy Saving Trust's consultation response notes that the current regional variations in electricity standing charges were designed for the system of the 1990s, with a few centralised power stations distributing power across the UK¹⁹. That rationale has weakened: more renewable energy is now generated regionally and locally, which removes the argument that standing charges need to be higher in regions such as Scotland to accommodate higher distribution costs¹⁹.

Northern Ireland is a separate market with its own supplier structure and its own standing charge arrangements, covered in detail on our page on energy bills in Northern Ireland. The GB figures on this page apply to England, Scotland and Wales.

Permitted and prohibited supplier charges explained

The standing charge is restricted by the energy price cap, which is reviewed on a quarterly basis¹⁵. On a fixed deal the charge is fixed; on a variable tariff it can move, but only within the cap¹⁸. Standing charges are covered by the price cap, which limits how much suppliers can charge, and suppliers are not required to include a standing charge at all¹⁴. Ofgem confirmed as long ago as 2013, when retail market reforms were introduced, that suppliers can set the standing charge at zero if they wish and some were doing this at the time²¹.

The charge itself is transparent on the bill: the Energy Ombudsman's guidance states that the cost of your standing charge is written on your bill, and that it is a daily charge you cannot opt out of or reduce, payable even if you use no gas or electricity¹¹. Ofgem's own plain-language definition is that it is a fee you pay each day, even if you do not use any energy on that day²².

Two further rules matter for particular groups. Where energy is resold, for example in some park homes or houses in multiple occupation, the Maximum Resale Price rules require that the standing charge be charged pro rata with the amounts payable for units of gas or electricity²³. And where a supplier takes charge recovery action for debt, Standard Licence Condition 21BA covers both fixed standing charge amounts and variable unit rate charges accrued within the 12 months preceding the action²⁴. Households that believe they have been overcharged can check with Ofgem whether they are owed money on their energy bill²².

The mandatory low standing charge tariff from Ofgem

The most concrete reform is a proposed licence change. Ofgem is proposing to amend the Standard Licence Conditions to require suppliers to offer a tariff with a standing charge that is priced £150 below the price cap nil consumption level per annum⁴. The consultation, titled Requirement to offer lower standing charge tariffs, sits under Ofgem's standing charges workstream⁵.

What this means in practice is that every supplier would have to have at least one tariff whose standing charge is £150 a year cheaper than the capped maximum, with the missing revenue recovered through higher unit rates on that tariff. Independent commentary describes the resulting tariffs as offering a significant reduction in the daily standing charge²⁵. For a household that uses very little energy, the maths works in its favour: the higher unit rate barely bites, and the £150 saving is close to pure gain. For a high-using household, the higher unit rate costs more than the standing charge saving, so the tariff is a poor fit.

The proposal has critics. NEA has argued that the standing charge proposals leave big unanswered questions, including that they will not address the regional differences consumers pay depending on where they live in Great Britain²⁰. Citizens Advice, responding to an earlier government consultation on the price cap's operating cost allowance, argued that the balance between standing charges and unit rates should be left to the ongoing standing charge review rather than settled piecemeal²⁶.

Trial of part fixed daily charges

Running in parallel is a trial of a genuinely different tariff design. Ofgem is inviting domestic energy suppliers to collaborate on a trial of a restructured standing charge tariff, led by its Consumer Insight and Behavioural Science team⁵. The objective is to explore how domestic consumers respond to a tariff design that introduces a separate element to their standing charge that varies with their electricity usage during peak periods⁵. Energy UK describes the design simply: the standing charge is split in two, with one part varying with the customer's electricity usage¹⁴.

The trial structure is set out in full in Ofgem's trial document:

The consumer proposition is the interesting part: participants in the trial will be able to reduce their daily standing charge if they use less energy at peak times⁵. Suppliers taking part must share half-hourly usage data and other relevant information with Ofgem and its research partners, at two junctures, January 2026 and at end-line⁵. Ofgem frames the trial as part of its longer-term evidence-gathering programme on cost recovery and demand flexibility, running alongside the shorter-term policy work on low or zero standing charge tariffs⁵.

Other options under consideration

Beyond the required tariff and the trial, several bigger redesigns have been proposed. Energy Saving Trust considers that there is a good justification for removing standing charges from energy bills due to the inherent unfairness such charges can create, and suggests that costs could instead be allocated via a flat rate addition to the unit cost, supported by mechanisms such as a social tariff or "energy prescriptions" for low income or vulnerable customers²⁷. The End Fuel Poverty Coalition has backed an "Energy For All" design with no standing charges, a free band of essential energy, and excess use charged at a premium, funded by windfall profits and an end to fossil fuel subsidies¹⁶.

The Joseph Rowntree Foundation has modelled a rising block tariff in detail, with a universal allowance for every household topped up for each child, charged at a discounted rate below the threshold and a premium above it. The electricity threshold would represent 77% of typical annual electricity usage and the gas threshold nearly 50% of annual gas usage²⁸. On this design the scheme could reduce energy bills for the median household by £150 a year at a cost of just under £5 billion²⁸. But the modelling is candid about the limits: a fiscally neutral version, where higher users pay more so the scheme costs nothing overall, produces intolerable numbers of losing households, with between 30% and 40% of households in income deciles 5 to 7 set to lose by around £200²⁸. JRF concludes that general taxation remains the most progressive and sustainable way to fund support²⁸.

Citizens Advice has raised a different concern about zero standing charge variants of the price cap: that they could increase overall system costs and would counteract the need for tariff innovation and increased consumer flexibility as part of the Clean Power 2030 plan²⁹. Ofgem itself decided in August 2022 against taking supplier failure costs out of standing charges, having weighed the alternatives¹⁰. The costs do not disappear; they are reallocated.

One sector shows what happens when standing charges rise unchecked. At rapid and ultra-rapid electric vehicle charging sites, standing charges have risen by up to 462% between 2021/22 and 2024/25 and now represent up to 70% of total energy costs, compared to around 15% for comparable businesses; slow and fast charge point operators have seen a 389% increase³⁰. It is a reminder that the charge is a policy choice about where costs sit, not a law of nature.

Why prepayment users cannot avoid the daily charge

For prepayment households the standing charge is the hardest edge of the system. NEA's guidance is stark: customers who self disconnect because they cannot afford energy are still liable to pay the standing charge¹⁵. A prepayment meter that runs out of credit stops supplying energy, but the daily charge continues to accrue, building debt that must be repaid before the meter returns to normal operation. This is why the charge features so prominently in fuel poverty campaigning, and why the 2023 increase of 7.8% for prepayment customers, though smaller than the 9.7% for Direct Debit customers, fell on the households least able to absorb it¹⁶.

The reform options on the table would change this picture in different ways. A required low standing charge tariff would let a prepayment household on very low usage pay £150 a year less in fixed charges, at the cost of a higher unit rate when it does use energy⁴. The split charge trial's no-loss guarantee means participating customers will never pay more for their standing charge than they would have under their existing tariff, with supplier funding covering any under-recovery during the trial⁵. Zero standing charge deals, where they exist at all, are rare and come with catches, typically higher unit rates¹¹.

Resold energy is a further risk for prepayment households in rented accommodation. The Maximum Resale Price rules require that a standing charge be charged pro rata with the amounts payable for units of gas or electricity, protecting residents of premises where energy is resold from being charged a full daily charge on top of inflated unit rates²³. More on how prepayment meters work, including emergency credit, is on our page on prepayment meters, and on self-disconnection when a meter runs out.

Reform implications for homes generating their own power

The standing charge is the part of an energy bill that energy independence cannot escape. The House of Commons Library defines it plainly: standing charges are a daily charge that energy customers have to pay even if they use no energy³¹. The charge is used to recover the costs required to provide energy company services, including providing and maintaining the wires, pipes and cables that deliver power to a customer's door, through to the staff and buildings required for the energy business to function³¹. A household that generates all of its own electricity still pays the electricity standing charge while it remains connected, because the charge pays for the connection and the system around it, not for the units.

That has two implications for a home aiming at self-sufficiency. First, the standing charge sets a floor on the cost of grid connection that no amount of generation or efficiency removes, so the business case for solar, storage or efficiency has to clear a fixed annual cost, around £309 a year on average across GB, before it saves a penny². Second, the direction of reform matters. If costs move out of the standing charge and into unit rates, a low-consuming, self-sufficient household pays less, because it buys few units; a high-consuming household pays more. The split charge trial points at a third model, where the charge itself responds to behaviour, and participants can reduce their daily standing charge by using less energy at peak times⁵.

The dependence that remains is structural: the network connection, the supplier relationship and the recovery of policy costs all sit outside a household's control. Reform changes who pays and how, and the trial tests whether the charge can be made to reward flexibility, but no proposal in the current programme abolishes the charge itself. The wider relationship between bills and independence is covered on our page on energy bills and energy independence, and the full context of the cap on our energy bills and price cap guide.