Electricity standing charges under Ofgem's energy price cap jumped by more than 80% in April 2022, according to a House of Commons Library briefing on standing charges. The same briefing records further increases of more than 10% in April 2023 and April 2024.
The April 2022 rise was largely due to supplier of last resort (SOLR) costs. Many smaller suppliers went out of business at the start of the energy crisis in late 2021 and early 2022, and their customers were switched to other suppliers who faced substantial additional costs. SOLR costs were added to network costs allowances in the energy price cap through the standing charge for electricity and the unit price for gas. The briefing states this explains why gas standing charges did not increase substantially at the time.
Standing charges are a daily charge that energy customers pay even if they use no energy. Ofgem describes what they cover:
"The standing 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 function."
Later changes kept electricity standing charges rising. SOLR costs fell in April 2023, but the overall electricity standing charge still increased because costs for the high-voltage transmission network were shifted from unit prices to standing charges. Network standing charges for electricity rose again in April 2024, fell back in April 2025, and were set to increase again in April 2026 to their highest ever level under the price cap.
In April 2024, allowances for supplier profit were partially shifted to standing charges and increased overall. At the same time, a levelisation charge was added to standing charges for direct debit customers to fund lower standing charges for prepayment customers. Since April 2024, prepayment standing charges have been set at the same level as direct debit charges.
Increases in gas and electricity standing charges in the final quarter of 2025 and first quarter of 2026 were mainly due to the higher costs of the expanded Warm Home Discount from winter 2025-26. From April 2026, 80% of Warm Home Discount costs shifted to unit costs, which cut gas standing charges and reduced the extent of the electricity standing charge increase.
Why it matters for households
A standing charge is fixed, so it takes a larger share of the bill for a home that uses little energy and a smaller share for one that uses a lot. Under the October to December 2026 direct debit price cap, average standing charges are 54.8 pence a day for electricity and 29.7 pence a day for gas, or 84.5 pence a day for dual fuel customers. Standing charges make up 18% of a typical dual fuel bill, down from a recent peak of 24% in the third quarter of 2024.
The briefing gives a sharper picture at lower consumption. At Ofgem's low consumption level for electricity, standing charges make up 32% of a final bill, meaning one quarter of consumers face standing charges worth at least 32% of their annual electricity bills. At the medium consumption level, standing charges are 13% of a gas bill and 23% of an electricity bill.
For a household trying to cut its exposure to fixed costs, the scope is limited. Suppliers do not have to charge the maximum daily amount under the price cap, or any standing charge at all, and alternative tariffs with no standing charge but a higher unit price exist outside the cap. Ofgem has acknowledged that the way it sets the cap strongly influences how suppliers recover fixed costs. Electricity standing charges also vary substantially between the 14 supply regions because of differences in distribution network charges, while gas standing charges vary little.
What happens next
Ofgem launched a call for input on standing charges in November 2023, published an options paper in August 2024, consulted on a zero standing charge option within the price cap in February 2025, and published a summary of responses and planned next steps in July 2025. In September 2025 it announced it planned to require suppliers to offer at least one lower standing charge tariff for all payment methods in all regions and to smart and traditional meter customers. A one-year pilot of lower standing charges, due to start in April 2026, was put back to June 2026; it will first be offered by four of the big suppliers and the number of customers who can sign up will be limited. In July 2026 Ofgem will bring in new lower Typical Domestic Consumption Values for its presentation of bills under the price cap.
Sources1 cited
- Energy standing charges - House of Commons Library, commonslibrary.parliament.uk