Ofgem has set out a one-year pilot of lower standing charges, which it announced would start in April 2026 and later put back to June 2026. The tariffs will first be offered by four of the big suppliers, and the number of customers who can sign up will be limited1.
The pilot follows a long sequence of regulatory work on standing charges, the daily fee energy customers pay even when they use no energy1. Ofgem launched a call for input in November 2023, published an options paper in August 2024, consulted on a zero standing charge option within the energy price cap in February 2025, and published a summary of responses and planned next steps in July 20251. 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 both smart and traditional meter customers1.
"they decided to launch a one-year pilot of lower standing charges starting in April 2026 (later put back to June 2026). These will first be offered by four of the big suppliers and the number of customers who can sign up will be limited."
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 customers1. The electricity figure falls by 2.4 pence a day in October because of the government's decision to remove VAT from electricity bills for six months from October 2026, while the gas figure rises by 0.7 pence a day, largely through a higher allowance for supplier operating costs1.
Standing charges are a fixed cost, so they take a larger share of a bill for households that use little energy. Under the Q4 2026 cap they make up 18% of a typical dual fuel bill, down from a peak of 24% in Q3 20241. At Ofgem's low consumption level for electricity, standing charges account for 32% of the bill, meaning one quarter of consumers face standing charges worth at least that share of their annual electricity bill1.
| Measure | Detail |
|---|---|
| Average electricity standing charge, Q4 2026 direct debit cap | 54.8p a day |
| Average gas standing charge, Q4 2026 direct debit cap | 29.7p a day |
| Dual fuel total | 84.5p a day |
| Share of typical dual fuel bill | 18% |
| Share of electricity bill at low consumption | 32% |
Electricity standing charges jumped by more than 80% in April 2022, largely because of supplier of last resort costs after many smaller suppliers failed1. They rose again by more than 10% in April 2023 and April 2024, fell back in April 2025, and were set to rise again in April 2026 to their highest level under the price cap1. Policy cost elements fell from April 2026 as funding of the Warm Home Discount shifted away from standing charges towards unit costs1. In July 2026 Ofgem will bring in new lower Typical Domestic Consumption Values for its presentation of bills under the price cap1.
Why it matters for households
A standing charge is payable whether or not a home uses any energy, so it sets a floor under the bill. For a household that has cut consumption through insulation, solar or changed habits, the fixed daily charge becomes a larger part of what is paid, and the savings from using less are smaller than the unit rate alone would suggest. Lowering the standing charge shifts fixed network and operating costs into unit prices, so a household using more energy would pay more and one using less would pay less. The pilot's limit on sign-ups means availability, not eligibility alone, will decide who can take part.
What happens next
The pilot is due to begin in June 2026, having been put back from April 2026, with four large suppliers offering lower standing charge tariffs to a limited number of customers1. Ofgem's September 2025 requirement for suppliers to offer at least one lower standing charge tariff across all payment methods and regions remains the stated direction1. New lower Typical Domestic Consumption Values take effect in July 20261.
Sources1 cited
- Energy standing charges - House of Commons Library, commonslibrary.parliament.uk