What is a standing charge?
Ever looked over your energy bill and spied the words ‘standing charge’? While this may seem like a sneaky extra fee, it’s a standard part of most energy bills. Read on to find out precisely what it means.
Last updated: 23 October 2020
In this guide you’ll find information including:
What is a standing charge on energy bills and what is it for?
How much is an average standing charge?
Do I have to pay the standing charge if I am away?
How much is the standing charge on a prepayment plan?
Do smart meters include a standing charge?
Can I have gas and electricity with no standing charge?
Who offers gas and electricity with no standing charge?
When should you have a gas or electricity tariff with no standing charge?
Are tariffs with no standing charges cheaper?
Empty property standing charges
How can I lower my standing charge?
What is a standing charge on energy bills and what is it for?
A standing charge may seem like a sneaky extra fee, but it’s a standard part of most energy bills. Standing charges are implemented to help suppliers cover the costs of providing you with energy. The unit cost that you see in the breakdown of your bill is the price of the energy you use; it doesn’t cover the cost of account admin, infrastructure maintenance and so on. As electricity and gas supplies have different overheads, you will have a different standing charge for each service.
How much is an average standing charge?
The cost varies wildly depending on your supplier and your plan, but the prices range between:
10p – 80p per day for gas standing charges
5p – 60p per day for electricity standing charges
So, if you were paying high standing charges you would be looking at costs of almost £300 a year for gas and over £200 a year for electricity – and all before you even started using any energy. This is why it’s important to consider standing charges when you’re preparing to switch suppliers or searching for the right energy tariff. Good standing charges could be the difference between paying 15p a day towards your energy admin or a whopping £1.40 (or £42 a month)!
On TrustPilot, Robin Burrows says that the standing charge rate had a big impact on their switch:
"My current supplier has stopped offering my product (No usage costs, all standing charges) so I was looking for a good fixed price deal. Via the comparison website Shell Energy gave an excellent saving. Usage costs for dual fuel are similar but Shell's standing costs are much cheaper so the decision was easy. The switch, so far, has been hassle free and easy."
Robin Burrows, TrustPilot
Standing charges for British gas and electricity suppliers
The following table shows the current price of standing charges for the big six energy suppliers’ standard tariffs. These are not necessarily the lowest standing charges offered by these companies, but do show how much customers will pay if they don’t find the best tariff when their contract ends. The standing charges are based on the customer making Direct Debit payments from a central Birmingham address.
| Provider | Gas standing charge | Electricity standing charge |
|---|---|---|
| British Gas | 27.34p per day | 24.35p per day |
| EDF | 26.08p per day | 24.35p per day |
| E.ON | 26.07p per day | 24.35p per day |
| npower | 26.07p per day | 24.35p per day |
| ScottishPower | 26.07p per day | 24.35p per day |
| SSE/OVO | 26.08p per day | 24.35p per day |
Prices valid September 2020.
Do I have to pay the standing charge if I am away?
Yes, you do. If you’re on an energy contract, you will need to pay standing charges even if the property is empty for a while. If you’re away on holiday for a month, you will see the cost of energy consumption drop significantly, but your standing charge will stay the same. This is because your account and connection still have to be maintained whether you’re using them or not.
You can think of it like paying rent. Even if you opt to go on holiday for a month, your landlord will still expect to be paid for keeping the property available for you for when you do choose to use it.
How much is the standing charge on a prepayment plan?
Standing charges for customers with prepayment meters are often higher than they would be on a standard plan because there is less admin involved. If you’re on a prepayment tariff – sometimes referred to as a pay-as-you-go PAYG plan – you don’t need to make allowances for extra standing charges as they’re rolled into the cost each time you top-up. Prepayment meters, along with variable tariffs, also benefit from the energy price cap.
Standing charges for PAYG gas and electricity tariffs
The following table shows the current price of standing charges for a random pick of the big six energy suppliers’ prepayment tariffs. Again, the standing charges are for a central Birmingham address.
| Provider | Gas standing charge | Electricity standing charge |
|---|---|---|
| British Gas | 36.34p per day | 28.90p per day |
| EDF | 36.19p per day | 28.70p per day |
| E.ON | Price unavailable | Price unavailable |
| npower | 36.18p per day | 28.70p per day |
| ScottishPower | 28.70p per day | 36.18p per day |
| SSE/OVO | 36.18p per day | 28.69p per day |
Prices valid September 2020.
Do smart meters include a standing charge?
Yes, plans that work with smart meters have a standing charge, but these can be easier for energy companies to administer and therefore often have lower standing charges.
Standing charges for smart meter gas and electricity tariffs
The following table shows the current price of standing charges for a random pick of the big six energy suppliers’ smart meter tariffs. As before, the standing charges are for a central Birmingham address.
| Provider | Gas standing charge | Electricity standing charge |
|---|---|---|
| British Gas | 25.21p per day | 25.00p per day |
| EDF | 21.37p per day | 20.37p per day |
| E.ON | Price unavailable | Price unavailable |
| npower | 21.06p per day | 22.78p per day |
| ScottishPower | Price unavailable | Price unavailable |
| SSE/OVO | 26.08p per day | 24.35p per day |
Prices valid September 2020
Can I have gas and electricity with no standing charge?
Yes, you can, although finding these deals isn’t easy and your options may be limited further based on your location. If you can find such a plan, a standing charge will still be printed on your energy bill, but the price will be shown as ‘£0’.
Who offers gas and electricity with no standing charge?
Ebico’s Zero Green plan has no standing charge, but how long this will be maintained is unclear. Ebico’s energy supply partner Robin Hood Energy is being sold to British Gas, meaning that Ebico’s customers will be migrated to the company, too. Although British Gas has promised to ‘match or beat the price’ of Ebico’s current tariffs, the announcement doesn’t discuss whether customers will continue to enjoy zero standing charges.
Utilita offers no-standing-charge gas and electricity plans, but it’s aimed at a market that struggles with fuel poverty and focuses on prepayment tariffs, with the first units of the day being charged at a premium. If you’re likely to use gas and electricity every day, standard Direct Debit plans may offer better value for money if you can afford them.
When should you have a gas or electricity tariff with no standing charge?
If you live in your home all week long throughout the year, you’re unlikely to gain much by switching to a zero-standing-charge energy plan. However, there are cases where they can be the better option:
If your house is empty during the week
If you work away and only return home during the weekend, then you may find you pay more in standing charges than you do for energy consumption.
If you spend half the year elsewhere
If your property is frequently empty because you spend several months of the year elsewhere then it will definitely be worth looking into a zero-standing-charge tariff. Otherwise, you’ll end up paying for something you simply don’t use.
If you are paying a separate bill for part of your property
If you have a part of your property you only use intermittently that has its own energy meters, like a guest annexe, it could make sense to use a gas or electricity plan with no standing charge.
Are tariffs with no standing charges cheaper?
Tariffs with no standing charges can be significantly cheaper in the right circumstances. For instance, if your property isn’t always occupied or you are using the plan to supply a meter in an infrequently used space like a guest annexe. However, for a home that is occupied all the time, they’re not the best choice. This is because energy unit costs of a plan with no standing charge are often higher than a standard fixed-rate price plan. Paying a standing charge can give you access to some of the best-price energy plans, which will offer better overall value than a tariff without a standing charge but with high-price energy instead.
Empty property standing charges
If you have an empty property, either as a landlord or as a homeowner who’s not yet moved in, it’s possible to avoid paying standing charges. Contact your energy supplier to let them know no one is in the property and no energy is being used. You will need to send regular meter readings to prove that the power hasn’t been switched on.
Keep in mind that just because you’re not living in the property full-time energy may still be used there. If you haven’t moved in because of renovation works, for example, you will still need to pay standing charges as workers will be using power for their tools.
What’s more, if you were in this situation, but you hadn’t entered into a contract as you weren’t yet living in the property, the energy supplier would put you on a ‘deemed contract’ as soon as the workers started using their tools. A deemed contract is always put in place if you consume energy without agreeing a named contract with the supplier first (including when your existing contract comes to an end and you don’t negotiate a new one).
Ultimately, if you’re using any energy, the company supplying that power will insist you pay standing charges whether you’re in the property or not and whether you signed a contract or not. Given that a deemed contract never offers the best value, you should negotiate the best deal before your workers arrive if you want to save money.
How can I lower my standing charge?
Prepayment tariffs often offer higher standing charges. You can opt for a zero-standing-charge tariff as detailed earlier, but these may not work out to be as cost-effective as a fixed-price plan if you occupy your property all year round. You should think carefully about when you use power, before deciding to go ahead with a zero-standing-charge tariff.