Guide to energy standing charges

Take a look at your energy bill and you’ll notice that, as well as your gas and electricity use, there’s a ‘standing charge’.

But what exactly is a standing charge? And why should you pay it? We have the answers.

Sofia Hutson

From the Energy team

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Posted 27 MAY 2021

What’s a standing charge?

A standing charge is a fixed daily amount you have to pay for energy, no matter how much you use. It even applies to properties that are empty for part of the year – a holiday home, for example. It’s added to most gas and electricity bills.

The charge covers the costs your energy supplier takes on in order to get you your gas and electricity. Think of it like a line rental, but for your energy rather than your phone.

Standing-charge 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 rate.

How much do I have to pay for a standing charge?

The daily standing charge depends on your energy supplier and where you live. Over the course of a year, it can add up to quite a large amount.

Typical standing charges range from:

electricity – 5p to 60p per day
gas – 10p to 80p per day

So, if you were paying towards the upper end of the scale for both fuels, it would cost you around £500 a year before you even started using any energy.

Ofgem proposed changes to curb standing charges in 2016, but most energy providers continue to add them.

There is, though, an energy price cap, which limits the unit rate and standing charge a supplier can charge you for its standard variable tariff. This can save households up to £100 per year, according to Ofgem.

Do I pay a standing charge with a prepayment meter?

Yes, standing charges are also included with prepayment energy tariffs – where you pay for your energy in advance by topping up your meter with credit.

These charges must still be paid even if you don’t have any credit on your meter. So, when you next top up, you’ll have to pay back all the standing charges you owe. This is something you need to watch out for if you don’t use any gas in summer when the heating is off.

Standing charges for prepayment customers are typically around 28p a day but, again, this will depend on your supplier and where you live.

Is there a standing charge for smart meters?

There is indeed. You’ll still pay a standing charge if you have a smart meter. But it’s often lower than you’d get with a standard meter as there’s less admin involved for suppliers.  

The standing charge will usually be included in the total you see on your in-home display showing you how much energy you’ve used daily, weekly and monthly. That’s why you’ll sometimes see you’ve been charged a small amount even if you’ve been away from home or haven’t used any gas all day.

Are there energy suppliers who don’t have a standing charge?

There are very few energy suppliers that offer tariffs without a standing charge, or who set a rate of £0 on your bill. Utilita is one such example. It focuses on smart pay-as-you-go energy, with the first units of the day the most expensive.

Because the choice of zero standing charge deals is limited, it’s worth comparing energy tariffs with a standing charge against those without to make sure you’re getting the best value for money over the course of a year.

If the standing charge is relatively low where you live, it’s likely that you’ll be better off overall with a tariff that does have a charge unless your property is empty a lot of the time.

What are the advantages of a tariff with zero standing charges?

Energy tariffs without standing charges can be cost-effective for some people because:

you only pay for the energy you use
you can save on your bills if you have a property that’s
left empty regularly, like a second home

Top tip – if you’ve bought a home that you haven’t yet moved into, contact your energy supplier to tell them that the property is unoccupied and no energy is being used. You may be able to get the standing charge removed.

What are the disadvantages of a tariff with zero standing charges?

Energy deals without standing charges probably won’t be right for most households. That’s because:

the unit rates for gas and electricity 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.