Guide to energy standing charges
Guide to energy standing charges
Take a look at your energy bill and you’ll notice that, as well as gas and electricity usage, there’s a ‘standing charge’.
But what exactly is a standing charge? And why should you pay it? We’ve got the answers.
What’s a standing charge?
A standing charge is added to most gas and electricity bills. It’s a fixed daily amount that customers have to pay, no matter how much energy they use. It even applies to properties that are unoccupied for part of the year – a holiday home, for example.
A standing charge covers the costs your energy supplier incurs to get gas and electricity to you. These costs include:
- using and maintaining the energy networks, wires and pipes that carry gas and electricity across the country to your home
- keeping your home connected to the energy network
- carrying out meter readings
- payments towards government initiatives that help vulnerable households, and reduce CO2 emissions.
If you have a dual fuel energy bill, you’ll pay both a gas standing charge and an electricity standing charge. These are listed on your energy bill at a daily unit rate.
How much do I have to pay for a standing charge?
The daily standing charge depends on your energy supplier and, over the course of a year, can add up to a substantial sum.
Typical standing charges range from:
- electricity – 5p to 60p per day
- gas – 10p to 80p per day
Ofgem proposed changes to curb standing charges in 2016, but most energy providers continue to add them.
There are, however, talks of a cap on the standing charge, which currently averages about £156 per year. This could benefit low-income households in particular, with an estimated saving of up to £100 per year.
Are there energy suppliers who don’t have a standing charge?
There are a few energy suppliers who don’t set a standing charge, or set a rate of £0 on your bill.
What are the advantages of a tariff with zero standing charges?
Advantages of an energy tariff without a standing charge include:
- you only pay for the energy you use
- they can be good for occasional-use properties, such as holiday homes.
What are the disadvantages of a tariff with zero standing charges?
Disadvantages of a tariff that has no standing charge include:
- the energy unit rates are typically higher
- medium to high energy users may end up paying more for their energy
Where can I compare different energy tariffs?
Right here at Compare the Market. Start a quote with us and you can compare a range of tariffs and energy suppliers. Your quote results will show you a breakdown of each tariff, including the unit rates, standing charges and any exit fees.
Compare energy prices today, and see if you can save money by switching to a cheaper deal.
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