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What is a standing charge?

What is a standing charge?

A standing charge is a fixed daily fee that most energy customers pay to connect to a supply, maintain the energy supply networks, take meter readings and cover the cost of dealing with failed energy suppliers.

No matter how much energy you use, your standing charge will stay the same and is a daily amount added to your overall energy costs. For example, if your home is lying empty you still need to pay the standing charge. Similarly, if you’re a Pay As You Go customer and don’t use any gas over summer, your meter will continue to collect your standing charge.

This means that if you’re a low user of gas and electricity, your standing charge may make up most of your bill.

How do I pay for my standing charge?

If you’re a Pay As You Go customer, the standing charge will be collected as a fixed weekly amount from your meter. If you use any other payment method, you’ll be able to view the standing charge as a daily rate on your bill. Keep in mind that if you’re a dual fuel customer, you’ll pay a gas and an electricity standing charge. Everything will be clearly listed on your energy bill with the daily rate.

Ofgem requires all tariffs that include standing charges display the  unit rate and standing charge as separate costs. This helps make sure tariffs can be easily compared across the energy market.

How does the price cap affect standing charges?

The energy price cap is set by Ofgem and is updated every three months. It doesn’t set a limit on the unit rate or standing charge a supplier can charge you, but it does set a limit on the overall amount you will pay. For example, you could be on a tariff that has a higher unit rate but a lower standing charge.

Your unit rate and standing charge will vary based on a number of factors, including your payment method, meter type and where you live.

I have a smart meter - do I still have to pay standing charges?

Unless you have an energy tariff without standing charges, all customers no matter their meter type will pay a standing charge. The standing charge will usually be included in the total you see on your smart meter’s In-Home Display. This is why when viewing your energy use, you may see a small amount displayed even when you’ve been out all day or return from a holiday.

Last updated: 28 February 2024

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