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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.

Peter Earl
From the Energy team
2
minute read
posted 11 FEBRUARY 2020

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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