Standing charge what does it mean

The advantage of having no standing charge on your energy tariff is that you only pay for the energy you use, nothing more. The unit rate is the price-per-unit of the gas and electricity you consume in your household. For example, electricity is measured in kilowatt per hour kWh , so a unit rate would be the cost per each kWh used!

If your energy tariff does not have a standing charge, your price-per-unit is going to be higher to compensate. The rule of thumb when deciding between a tariff with or without a standing charge is this: if your place of residence is empty for nine months or more, an energy tariff with no standing charge could most likely be your best bet.

Tariffs with standing charges are the most popular for a reason, and while customers are charged even if their premises are empty, the unit price is so much lower that there can be no complaints. The reason you pay a standing charge is to cover the costs of actually having a running supply of gas and electricity to your home - your unit rates are on top of the standing charge.

Essentially, you paying your standing charge is you paying for the privilege of having an energy supply, and is usually paid in a flat rate. Ofgem removed standing charges as a compulsory added fee back in following a recommendation by the Competition and Markets Authority. However, most suppliers still add the standing charge onto the end of their energy tariffs. They pay for things like meter readings, and keeping your house connected to the mains electricity and gas supply.

There will also be costs related to government schemes included in your standing charges. Examples of these schemes include ones that aim at CO2 reduction and ones that are designed to help homes in need. Despite floating the idea a few years ago, Ofgem have not imposed a limit on how high a standing charge can be. However, the overall energy price cap they do enforce does account for standing charges.

Source: Ofgem. Prepayment meter users still have to pay a standing charge. Read our guide on what to do if you are in debt to your supplier for more help and information.

This will vary depending on the amount of time that you spend in the property over the course of the year. You will find much more competitive rates on energy plans with standing charges. We use cookies and similar technologies. You can use the settings below to accept all cookies which we recommend to give you the best experience or to enable specific categories of cookies as explained below. Find out more by reading our Cookie Policy. Share this page on Facebook Share this page on Twitter.

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