When you receive your energy bill, you’ll likely notice a standing charge alongside your gas and electricity unit rates. But what is a standing charge? And are you required to pay them?
In this guide, Energy Helpline will explain why suppliers add this fee to your bill and whether switching to a no standing charge tariff could save you money.
What is a standing charge?
The first question is why are we charged this fee by our suppliers?
A standing charge is a daily fee automatically added to most gas and electricity bills. It’s set at a fixed amount that you are required to pay even if you used no energy at all that day.
The fee is paid to your energy supplier for the supply of gas and electricity to your property.
The standing charge covers the costs including:
- Carrying our meter readings
- Keeping your property connected to the main gas and electricity supply
- Payments for government initiatives including help for vulnerable households and C02 emission reductions
All standing charges will be listed on your energy bill at a daily rate. If you’re on a dual fuel deal, you will see your gas and electricity standing charges listed.
Is there a price cap on standing charges?
There is no specific price cap on how high a supplier can set your standing charges. However, you will still be protected by the Ofgem Energy Price Cap.
The price cap limits the amount a supplier can charge a domestic customer on a default energy tariff. This covers the full cost of your tariff including your standing charges.
How much is my standing charge?
The costs of standing charges can vary greatly from one tariff to another. You may find that a tariff with a lower standing charge features a higher unit rate and vice versa.
Typical standing charge costs can range from:
- 5p to 60p per day for electricity
- 10p to 80p per day for gas
Over the course of a full year, your standing charges can add over £100 to your energy bill. This has left many people searching for no standing charge tariffs in attempt to reduce costs.
What is a no standing charge tariff?
As the name suggests, a no standing charge tariff will set your standing charges at zero throughout the duration of your contract. This means you will only be charged for the energy you use and will have no daily fee to pay.
What are the pros and cons of a no standing charge tariff?
The benefits of a no standing charge tariff include:
- You only pay for the energy you use
- Your bills are easier to calculate
The main drawbacks of a no standing charge tariff are:
- Your unit rates can be higher than on standard tariffs with a standing charge
- You may end up paying more for your gas and electricity if you are a high energy user
Should homeowners switch to a no standing charge tariff?
A no standing charge tariff can be ideal for anyone who owns a property they will not be using year-round. When the property is not being used, there will be very few energy bills to pay.
However, you should bear in mind that your tariff will likely have higher energy unit rates for the gas and electricity you do use.
Whether you can save money on your energy bills with a no standing charge tariff will depend on your individual circumstances.
When comparing energy deals, it’s important to consider your full estimated costs for a better view of your expected bills.
Should businesses switch to a no standing charge tariff?
A zero standing charge tariff can be particularly useful for businesses which operate seasonally or for only a few days a week.
As business gas and electricity standing charges can often be higher than domestic charges, potential savings for businesses can be even greater.
However, as with domestic users, it’s important to bear in mind how much business electricity and gas you use. High consumption businesses could end up paying more due to a higher unit rate on a no standing charge tariff.
Can I switch to a zero standing charge tariff with a prepayment meter?
If you have a prepayment meter at your property, you can switch to a no standing charge tariff just as anyone else would.
The pros and cons would be very much the same as any other tariff. However, you should bear in mind that unit rates are often already higher on a prepayment tariff than other standard tariffs. Once again, checking your full estimated billing will allow you to quickly compare the best tariff type for you.
How to Switch to a No Standing Charge Tariff
There is no real difference in the process of switching to a no standing charge tariff than any other energy deal. Most suppliers now offer a range of tariff options including zero standing charge plans.
When switching energy tariffs, it’s important to compare the full cost of any gas and electricity contract. By starting your comparison with Energy Helpline, you can easily view your full estimated bills.
To find out how much you could save, check out our energy comparison service to find the latest offers on the market right now.