'Low' or 'no standing charge' tariffs

What are standing charges?

Virtually all energy bills are made up of a unit rate – what you pay for each unit of gas and electricity you use – and a daily standing charge. This daily standing charge is the cost you pay to your energy supplier for having access to gas and electricity, even if you don't use any.

Standing charges have increased significantly over the past few years and can vary hugely depending on where you live. Under the Price Cap, an average household currently pays about 54p a day for electricity and 33p a day for gas – costing, on average, £316 a year. And for those who pay on receipt of bills, the costs are even higher.

Under regulator Ofgem's rules, suppliers aren't required to charge a daily standing charge, but virtually all do. In fact, there is only one supplier – Utilita – that offers a zero standing charge option.

Energy suppliers will soon need to offer tariffs with low or no standing charges

Energy suppliers will likely need to offer tariffs with low or no standing charges by next winter under new plans to tackle the issue of high standing charges, which make up over £300 of most people's annual bills.

MoneySavingExpert.com founder Martin Lewis has long campaigned for standing charges to be lowered, arguing that they unfairly penalise households on lower incomes and those looking to cut their usage – see Martin's Will energy standing charges be cut? blog for more info.

The new proposals, put forward by energy regulator Ofgem last December, could give energy bill-payers the option to go onto a new version of the Energy Price Cap with no or low standing charges but higher unit rates.

Ofgem is currently consulting on how this tariff could work. We'll update this guide when we have more details.

Low and zero standing charge tariffs

While virtually all providers charge standing charges, there are a few providers that offer no or low standing charges, but options are very limited. Before considering these tariffs, always check they are right for you. Don't just switch to lower your standing charge costs – make sure it's right for you based on your usage.

There is one 'no standing charge' tariff option – but it's likely only worth it if you use NO energy for long periods

Energy firm Utilita is the only supplier offering a zero standing charge option. Currently it's mainly for smart prepayment customers (though the firm told us it would allow those on Direct Debit who call to switch to it).

While there is technically zero standing charge on its tariffs, they do charge a much higher unit rate for the first two units of gas and electricity you use each day (then a lower, more normal rate, for all other usage after this).

This means if you use nothing in a day, you pay nothing. But if you have any level of use (even very minor usage) you do essentially pay a standing charge through the higher unit rates. Overall, for a typical user, the price works out roughly similar to a standard Price Capped tariff.

Yet if you are away or don't use any energy for a substantial number of days (for example, if you switched off anything that uses gas in warmer months), then it may well work out cheaper.

If you are on prepay, you can check how much it'll cost you and compare it to the rest of the market in our Cheap Energy Club comparison. If you pay by Direct Debit you'll need to call to get a quote and switch – though do make sure to compare that quote against the rest of the market before switching.

There is a 'low standing charge' option that offer £50 off the standing charges – but the unit rates track the Price Cap

EDF Energy has a 'low standing charge' tariff, offering a flat £50 off what you'd pay for standing charges under the Price Cap, regardless of energy use, payment method or region.

It's a Price Cap tracker, where the rates you pay for gas and electricity follow the Price Cap exactly, while the standing charge costs stay £50 (£25 for each fuel) under what's allowed under the Cap – so when the Cap moves, so will this tariff.

These are particularly good for those with low to medium usage (where the standing charge makes up a higher proportion of the bill). You can see how these compare to other tariffs in our Cheap Energy Club.

Should I go for a 'low' or 'zero standing charge' tariff?

The answer to this is all down to your energy usage.

• Do you have long periods where you use NO gas or electricity? 'Zero standing charge' tariffs are generally better for people who go numerous days without using any gas and/or electricity, as you can avoid paying anything on these days. This may be a good option for households that avoid using any gas during the warmer months, for example.

• Are you a low user of energy? Low energy users could also benefit from a 'low standing charge' tariff, as the annual standing charges make up a bigger proportion of the total energy bill.

• Are you a higher user of energy? If your household uses a lot of energy, a 'zero' or 'low standing charge' tariff is less likely to be beneficial, as the higher unit rates will likely negate any savings.

However, always do a full whole-of-market comparison to find the best tariff for your usage and region.

Why are standing charges so high?

Standing charges and unit rate are set by Ofgem under the Energy Price Cap. This Cap applies to firms' standard variable energy tariffs, which around two-thirds of households are on right now.

Standing charges are set to cover some of the 'fixed costs' of energy, which Ofgem believes should be largely shared equally. The fixed costs are weighted more heavily onto the electricity standing charge, as this is the more widely used energy in the UK, compared to gas.

These fixed costs have rocketed over the last few years for a host of reasons, including covering the costs of the energy retailers that went bust at the start of the energy crisis, plus large increases in policy and networks costs.

What is the average standing charge in the UK?

You can see the average standing charges for all payment methods under the Price Cap from 1 April below – for full region-by-region rates, see our Energy Price Cap rates guide.

Other ways to cut your energy bill

We've a host of MoneySaving tips to help you pay less for energy...

• Make sure you're getting all the help you qualify for. Use our free 10-minute benefit checker to see if you're missing out on any benefits or grants.

• You may be eligible for energy bills help this winter. There's the Warm Home Discount worth £150 for those on certain benefits, and some pensioners may also be eligible for up to £300 in Winter Fuel Payment. Plus, some can get Cold Weather Payments each winter.

• Pay energy bills by Direct Debit, if you can. Fixed monthly Direct Debit payments – where you pay a fixed estimate each month – could save you 5% to 10% compared to paying every quarter. See Energy Direct Debits Help for more info.

• Switch to a cheaper energy tariff. Some households can save £100s on energy bills by switching to a cheaper supplier or tariff. Use our Cheap Energy Club to find your best deal, or see how to switch energy supplier for more details.

• Check if you can get a free boiler or insulation. There are wads of freebies or grants from energy providers, from help with new boiler costs to free loft and cavity wall insulation. It's all part of their efficiency obligations to people in certain groups. See our Great British Insulation Scheme guide for more info.

• Get help from your supplier. Your energy supplier has to help if you're struggling to pay your energy bills. You can see a full run-down of what's available in our What to do if you're struggling with energy bills guide.

• Use less energy. There are lots of ways to reduce what you use. See our Energy savers checklist for pain-free changes, such as turning down your thermostat or tweaking your boiler's flow temperature. Also, see our Heat the human and Energy mythbusters guides for more tips.