Energy standing charges
What are standing charges? How have they changed over time? How and why do they vary? What proposals does the regulator Ofgem have for lowering them?
Standing charges are a daily charge that energy customers have to pay even if they use no energy.
Standing charges are in effect a fixed cost for connection to the electricity and gas networks. The energy regulator, Ofgem, describes standing charges as :
The standing charge is used to recover the costs required to provide energy company services, including providing and maintaining the wires, pipes and cables that deliver power to a customer’s door, through to the staff and buildings required for the energy business to function.
How much are standing charges?The average standing charges under the April to June 2026 direct debit energy price cap will be are 57.2 pence a day for electricity, 29.1 pence a day for gas and hence 86.2 pence a day for dual fuel customers. Average standing charges are due to remain broadly stable in the cap covering the third quarter (Q3) of 2026, for direct debit consumers these will be:
- electricity will remain at 57.2 pence a day
- gas will fall by 0.1 pence a day to 29.0 pence a day
Standing charges are a fixed cost so they take up a greater share of a household’s bill if it uses relatively little energy and a smaller share of a household’s bill if it uses a relatively large amount of energy. In total, standing charges make up 17% of a total dual fuel bill for typical levels of consumption under the Q2 2026 cap, down from a recent peak of 21% in Q3 2024.
The maximum standing charge for customers in Great Britain on standard variable tariffs (the default tariff for those not choosing a fixed term, ‘green’ or other tariffs) are set by Ofgem’s quarterly energy price cap. There are separate standing charge caps:
- for gas and electricity
- for customers paying by direct debit, standard credit (quarterly bills) and prepayment meter
- in each of the 14 energy supply regions
Energy suppliers do not have to charge the maximum daily amount under the price cap, or any standing charge at all. However, Ofgem has acknowledged that the way it sets the price cap “strongly influences how retail suppliers recover fixed costs”. Reducing the standing charge would mean fixed costs would have to be recovered through higher unit prices, but the maximum level for unit costs is also set by the cap. There are alternative tariffs (not covered by the cap) on the market which have no standing charge but a higher unit price for energy.
What costs do standing charges include?Source: Ofgem, Energy price cap (default tariff): 1 April to 30 June 2026 (Final levelised cap rates model (Annex 9)), 25 February 2026
Almost 60% of the electricity standing charge for the Q2 2026 is made up of the allowance for network charges. This consists of the costs of the national high voltage transmission system (22.3 pence a day) plus the lower voltage regional/local distribution system (11.6 pence a day).
The standing charge element for the transmission system increased by 65% in Q2 2026, or almost 9 pence per day. This was to fund a large increase in The National Energy System Operator's investment in the transmission network.
Core operating costs and industry charges made up just over one quarter of electricity standing charges. This includes the costs of smart metering.
There are no network charges included in gas standing charges as these costs are all added to unit prices for gas. Core operating costs and industry charges make up just over three quarters of average Q2 2026 gas standing charges.
Policy cost elements of standing charges were bereduced from April 2026 due to a shift in the funding of the Warm Home Discount away from standing charges and towards unit costs. The only policies funded through standing charges are the Warm Home Discount and, for gas only, the Green Gas Levy.
Earnings Before Interest and Taxation (EBIT) is an allowance for supplier profit. There is also an EBIT element in unit prices. The headroom element is intended to cover uncertain costs. Levelisation is a charge on direct debit customers only which funds a reduction in the standing charges for prepayment customers.
How have standing charges changed over time?Trends in average direct debit standing charges under the energy price cap are shown in the following chart. Gas and electricity standing charges under the cap were very similar before spring 2022. Electricity standing charges jumped by more than 80% in April 2022 and by more than 10% in April 2023 and April 2024.
Source: Ofgem, Energy price cap (default tariff): 1 June to 30 September 2026 (Final levelised cap rates model (Annex 9)), 27 March 2026
The April 2022 increase in electricity standing charges was largely due to ‘supplier of last resort’ (SOLR) costs. Many smaller suppliers went out of business at the start of the ‘energy crisis’ in late 2021 and early 2022. Their customers were switched to other suppliers who faced substantial additional costs because of this. SOLR costs were added to network costs allowances in the energy price cap through the standing charge for electricity and the unit price for gas. This explains why gas standing charges did not increase substantially at the time.
While SOLR costs fell in April 2023, the overall electricity standing charge still increased because of changes which shifted costs for the high-voltage transmission network from unit prices to standing charges for electricity. Network standing charges for electricity increased again in April 2024, fell back in April 2025 and will increase again in April 2026 to their highest ever level under the price cap.
There have also been recent increases in some standing charges elements for both gas and electricity due to changes in the cap methodology and government policy.
In April 2024, allowances for supplier profit were partially shifted to standing charges and increased overall. At the same time, the levelisation charge was added to standing charges for direct debit customers to fund lower standing charges for prepayment customers.
The increases in standing charges for both gas and electricity in the final quarter of 2025 and first quarter of 2026 were mainly due to the higher costs of the expanded Warm Home Discount (WHD) scheme from winter 2025–26. 80% of the costs of the WHD will shift to unit costs from April 2026. This added to the underlying cut in the standing charges for gas and reduced the extent of the standing charge increase for electricity.
How do standing charges vary by payment method and region?Variations in currrent standing charges under the price cap are illustrated in the charts below.
Source: Ofgem, Energy price cap (default tariff): 1 June to 30 September 2026 (Final levelised cap rates model (Annex 9)), 27 March 2026
Since April 2024, the standing charges for prepayment customers have been set at the same level as for direct debit customers, despite the higher costs associated with direct debit customers. This is ‘funded’ through the levelisation charge on direct debit customers mentioned earlier.
Standing charges for standard credit customers (those paying by quarterly bills) are higher. This is due to higher supplier operating costs and higher debt-related costs for these customers.
There are separate price caps in each of the 14 energy supply regions. The chart above shows that there is little variation in gas standing charges across the 14 regions. In contrast, there is substantial regional variation in electricity standing charges. This is due to differences in network charges, specifically the charges levied by the distribution network operators for the use of their networks.
How important are standing charges at different levels of consumption?Standing charges are a fixed daily cost faced by households. This means that they form a larger share of total bills for households which use less energy and a smaller share of total bills for households which use more energy.
The data presented earlier in this briefing uses Ofgem’s current Typical Domestic Consumption Values (TDCV) for medium consumers. The ‘medium’ TDCV is the median average consumption value, or the level which half of consumers use more than and half of consumers use less than. The latest medium TDCV level is 2,700 kilowatt hours (kWh) for electricity and 11,500 kWh for gas.
Only focusing on this medium TDCV can obscure how important standing charges are for households which use different amounts of energy. The charts below show how much of an annual bill standing charges make up at different consumption levels. They highlight the medium TDCV levels (where standing charges make up 14% and 24% of gas and electricity bills respectively) and also indicate the low and high TDCV levels. These are set by Ofgem at the 25th and 75th percentile of consumption: the levels which 25% and 75% of customers use less than respectively.
Source: Ofgem, Energy price cap (default tariff): 1 June to 30 September 2026 (Final levelised cap rates model (Annex 9)), 27 March 2026
The charts show, for instance, that at the 'low' consumption level for electricity, standing charges make up 32% of a final bill. In other words, one quarter of consumers face standing charges which make up 32% or more of their annual electricity bills.
Ofgem provides examples of the types of homes typical of each TDCV level:
- Low: flat or one-bedroom house with one or two people.
- Medium: two-to-three-bedroom house with two to three people.
- High: house with four or more bedrooms with four to five people.
In July 2026 Ofgem will bring in new lower TDCVs for its presentation of bills under price cap. These reflect lower levels of median average consumption in 2023 and 2024. The assumed medium level of consumption for gas will be reduced by 17% to 9,500 kWh, the level for electricity will be reduced by 7% to 2,500 kWh. There will be corresponding reductions in the high and low levels of assumed consumption.
These lower levels of assumed consumption mean that standing charges would make up a greater share of annual bills, all other factors remaining the same. However, the higher unit costs of energy under the July to September 2026 cap balances the lower consumption figures. Standing charges will therefore make up a similar share of typical bills for medium consumers in this cap: 13% for gas and 24% for electricity.
What reform proposals does Ofgem have for standing charges?In November 2023, Ofgem launched a ‘call for input’ on standing charges. This asked for views on standing charges and proposals for alternatives and was open for submissions until January 2024. In August 2024, Ofgem published an options paper on ways to reduce standing charges.
In February 2025, Ofgem launched a further consultation which asked for views on a zero standing charge option within the energy price cap. This would move the costs that make up the standing charge to unit prices, not eliminate standing charge costs altogether. The options proposed by the consultation were:
- a single higher unit price
- falling block tariffs (higher unit rates up to a set level of consumption and lower rates thereafter)
- rising block tariffs (lower unit rates up to a set level of consumption and higher rates thereafter)
In July 2025, Ofgem published a summary of responses and its planned next steps. It said that encouraging suppliers to offer low or no standing charge tariffs voluntarily had not led to a response that met consumer expectations. Following feedback, Ofgem said it would be looking at a wider range of options, including requiring all suppliers to offer one zero or lower standing charge tariff in all regions. This would be outside the operation of the price cap and, according to Ofgem “would accelerate consumer access to more flexible pricing options”.
In September 2025, Ofgem announced that it planned to go ahead with a new requirement for suppliers to offer their customers at least one lower standing charge tariff for all payment methods in all regions and to smart and traditional meter customers. It also launched a one-month consultation on the details of the lower standing charge proposal.
At the end of February 2026 Ofgem published a summary of responses to the consultation and announced its next steps on this initiative. In response to concerns about their proposals from charities and consumer groups they decided to launch a one-year pilot of lower standing charges starting in April 2026. These will first be offered by four of the big suppliers and the number of customers who can sign up will be limited.
Local area dataThe only geographical data on standing charges is the maximum values under the cap by energy supply region shown above.
Further informationThe following Library briefings look at energy prices in greater breadth and detail: