What Are Standing Charges and Do You Have To Pay Them?

What Is a Standing Charge?

The first question to answer is ‘what is a standing charge?’. Put simply, a standing charge is a set daily fee paid to your energy supplier. This covers costs incurred by your supplier including:

• Connecting your home or business premises connected to the main gas and electricity supply
• Providing you meter readings
• Covering the payment of government initiatives.

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.

What Is The Cost of Standing Charges in 2023?

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

In 2023, 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 removes these fees completely.

Cheapest Business Electricity Standing Charges - December 2023

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, as of December 1, 2023. Business electricity prices change daily due to a fluctuating market.

List Of Standing Charges

Cheapest Business Gas Standing Charges - December 2023

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 December 1, 2023. 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. The process of switching to a no-standing charge tariff is exactly the same as any other tariff.

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 no 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.