Ofgem launched a one-year lower standing charge tariff pilot in April 2026, following a consultation on lower standing charge tariffs in September 20251. British Gas, EDF, E.ON Next and Octopus are taking part, offering eligible customers a lower standing charge tariff to test the effect of lower standing charges on customers2. Ofgem expects these suppliers to increase their unit rates to cover the shortfall2.
The regulator's own account of the work appears in its Consumer Vulnerability Strategy progress report, published on 21 July 2026, which records that it "Consulted on lower standing charge tariffs in September 2025 and launched a one-year pilot in April 2026"1. An earlier account states that in September 2025 Ofgem confirmed plans requiring suppliers to offer at least one lower standing charge tariff, and also launched work around a zero standing charge option within the price cap framework3. Ofgem announced plans in December 2024 to ensure all suppliers offer a zero standing charge tariff alongside their regular tariffs in the near future2.
Progress among the participating suppliers has been uneven. As of 27 July 2026, Octopus had introduced its lower standing charge tariff trial to a limited number of homes2. The other three suppliers named in the pilot are not reported as having started2.
Standing charges under the price cap are set out below.
| Price cap period | Electricity | Gas |
|---|---|---|
| 1 July to 30 September 2026 | 57.19p per day | 29.04p per day |
| 1 October to 31 December 2026 | 54.83p per day | 29.68p per day |
Those figures are the averages for the two cap periods2. A separate account gives an average electricity standing charge of 57.21p per day for Direct Debit customers across England, Scotland and Wales for 1 April to 30 June 2026, with an average annual electricity standing charge of £209 by Direct Debit, £209 by prepayment meter, £240 by standard credit and £208 on Economy 7 by Direct Debit3. The average capped electricity unit rate over the same period is 24.67p/kWh3.
True zero standing charge tariffs remain rare. As of April 2026, only two suppliers offered no standing charge electricity and gas tariffs, E and Utilita, and both work only with prepayment meters2. None of the big six suppliers currently offers zero standing charge tariffs2. A separate account, dated March 2026, names the same two suppliers and states that both are tied to prepayment or pay-as-you-go arrangements3. E states that smart customers do not pay a standing charge on days when they consume no gas or electricity, and Utilita says its tariffs without a standing charge are only available to Pay As You Go customers3.
On savings, one account estimates that a household could in theory save over £315 on a typical dual fuel bill over a year using July 2026 price cap rates, though the actual amount is likely to be less because at least some of those costs are recovered from the higher unit rates charged2. A worked example using an annual standing charge of £209 and a no standing charge tariff priced 5p/kWh higher puts the break-even point at about 4,180 kWh a year; at a 3p/kWh increase the break-even point is about 6,967 kWh, and at 7p/kWh it is about 2,986 kWh3.
Why it matters for households
A standing charge is payable whether or not a home uses any gas or electricity, so it falls hardest on low-use households: a flat that is empty for part of the year, a well insulated home, a household living alone, or one with solar panels covering much of its demand2. Moving fixed costs into the unit rate shifts the balance towards those who use more, and away from those who use less, which is the trade-off the pilot is designed to measure2.
For a household's energy independence, the practical effect is on the floor cost of being connected. A lower standing charge reduces what a home pays before it consumes anything, which matters where supply is kept live but demand is minimal. It does not reduce the total cost of the network, metering and policy schemes that the standing charge recovers; those costs move to the unit rate instead3. Whether a given household ends up better or worse off depends on annual consumption against the break-even point, and the sources give different break-even figures depending on how much the unit rate rises3.
The pilot also sits alongside wider work on affordability. Ofgem's progress report records that at the end of 2025 around 58% of consumers who were behind on their bills were in arrears without a repayment plan1. It also records average debt rising from around £7 to £9 per week in 2020 to around £12 to £14 per week in 2025, and average debt repayment periods falling from 127 weeks for electricity and 121 for gas in 2020 to 107 and 102 respectively in 20251.
What happens next
The pilot runs for one year from April 20261. Ofgem's progress report states that the next cycle of focus sessions is planned for early 2027, to align with annual Social Obligations Reporting data1. It also records that Ofgem consulted on the proposed Debt Outcome in June 2026 and published a call for input on the Cost Allocation Review in July 20251. One account states that new tariffs with no standing charges are expected to appear once Ofgem's mandate comes into force later in the year, and that Ofgem is likely to need to add a cap for tariffs with no standing charge to allow unit rates to be higher without making them prohibitively expensive2. No date for that mandate has been reported.