Understanding Standing Charges

What Is a Standing Charge?

Standing charges are added to your gas and electricity bills as a fixed daily amount to cover the costs of maintaining the supply to your home or business premises, meter reading visits and any government support schemes. 

In most energy contracts, your standing charge costs will be added to your bill even if you have used no gas or electricity on that day. As the fee isn’t linked to your energy usage, your standing charge costs will remain the same unless your supplier informs you of a price change.

Standing charges normally appear on your energy bill in pence per day yet some suppliers may display pounds per month or quarter.

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How Do Standing Charges Work?

Standing charges are a fixed amount agreed upon in your contract and are charged daily. There’s a standing charge for each fuel. For example, if you have agreed to a business electricity contract with a daily standing charge of 67.3p this will add £245.64 to your annual bill (0.673 x 365 days).

What Is The Cost of Standing Charges in 2024?

Standing charge costs will vary significantly depending on your supplier and your tariff.

In 2024, business standing charges can cost between 15p and 160p per day. The average standing charge is approximately 28p per day.

At 28p per day, standing charges would add around £102 to your yearly business gas or business electricity bill.

Domestic standing charges typically range from 5p to 60p per day for electricity and 10p to 80p per day for gas.

With standing charges often adding more than £100 to a gas or electricity bill, many customers are keen to switch to an energy tariff that eliminates these fees.

Cheapest Business Electricity Standing Charges Q1 2024

Currently, there are no business electricity tariffs with no standing charges, but the table below shows the ten cheapest standing charges for a business in London that uses 25,000 kWh of electricity a year.

Data is from Love Energy Savings' panel of suppliers and represents tariffs available to a London (Region 12) business using 25,000 kWh of electricity, in Q1 of 2024 Business electricity prices change daily due to a fluctuating market.

List Of Standing Charges

Cheapest Business Gas Standing Charges - Q1 2024

Currently, there are no business gas tariffs with no standing charges, but the table below shows the ten cheapest standing charges for a business in London that uses 25,000 kWh of gas a year.

Data is from Love Energy Savings' panel of suppliers and represents tariffs available to a London (Region 12) business using 25,000 kWh of electricity, as of Q1 of 2024. Business electricity prices change daily due to a fluctuating market.

List Of Standing Charges

Can I Switch To a No Standing Charge Tariff?

No standing charge tariffs allow you to avoid this daily fee by setting the cost of your standing charges to zero. The major benefit of a no-standing charge tariff is that you will only be required to pay for the energy you use.

However, you should bear in mind that your energy prices per kWh will often be higher with a no-standing charge tariff.

Most energy suppliers have withdrawn tariffs without a standing charge but that doesn’t mean they won’t return in the future. If you’re looking for great deals on your bills, you should compare energy prices. Switching to a no-standing charge tariff is the same as any other tariff.

How Do I Pay My Standing Charge? 

Your daily standing charge is applied to your monthly or quarterly bill. No matter how much gas and electricity you use, you will always be charged a daily standing charge.

Is A No-Standing Charge Tariff Right For Me? 

As with any tariff option, there are benefits and drawbacks to switching to a no-standing charge tariff.

Some of the key benefits are:

• You will have no daily charges – you only pay for the energy you use
• You can often reduce your unit rates once you use a certain amount of energy
• Your energy bills will be easier to calculate
  
  

The downsides are:

• You will often be charged a higher unit rate to compensate for the zero-standing charge 
• Your bills may increase if you regularly have high energy usage
  
  

Opting for a tariff without a standing charge is only cost-effective in some situations. For example, a business that is only open seasonally or at weekends could make real savings by switching to a no-standing charge tariff. When the business is closed, energy bills will remain as low as possible.

For home energy customers, those who are away more often than not will likely see savings by choosing a no-standing charge tariff.  

However, if you’re a frequent high-energy user, it’s likely your bills will increase if you choose this type of tariff with typically higher unit rates. 

How To Switch To A No Standing Charge Tariff

The most important piece of advice when you compare standing charge tariffs is to take the full cost of your energy bills into account. No matter which tariff type you choose, it’s vital to view your full estimated yearly rates.

When you compare business or home energy tariffs with Power Compare, you can view the full cost of your gas and electricity based on your estimated energy usage.

With our comparison service, you can compare no standing charge tariffs from a wide range of trusted energy suppliers and receive advice on the right tariff for you from our team of expert advisers.