Gas and electricity standing charges explained

What are gas and electricity standing charges?

A standing charge is a fixed daily amount that you pay on your bill regardless of how much energy you use. Standing charges apply to both gas and electricity and will vary by supplier, where you live, how you pay and what meter you have.

Standing charges cover the suppliers cost of:

• Maintaining the energy supply network that delivers gas and electricity to your home
• Visiting homes to take meter readings
• Supporting government social and environmental schemes like the Warm Home Discount
• Failed suppliers exiting the energy market – electricity only

It’s the cost of having a gas or electricity supply – like line rental for energy.

How do standing charges work? 

You’ll see two main charges on your energy bill:

Unit rate – the cost you agreed with your energy supplier for each kilowatt hour (kWh) of gas or electricity you use, which could be fixed or variable.

Check out our helpful guide to learn more about what a kWh is and how it’s calculated.

Standing charge – a fixed daily charge you pay in addition to the unit rate regardless of how much gas or electricity you use to cover the cost of being connected to the energy network. Like line rental for energy.

Ofgem’s reason for having separate standing charges is to distribute the amounts evenly across all of us. If the costs that make up the standing charges were added to gas and electricity unit rates, it could lead to vulnerable households paying proportionately higher energy costs.

When do I pay electricity and gas standing charges?

The gas and electricity standing charge is a daily fee that’s applied to your bill if your property has a gas and/or electricity connection, even if the property is empty for part of the year.

If you’re moving home, you may be able to ask the energy provider to suspend standing charges if the property is going to be unoccupied for some time.

How much is the standing charge for electricity and gas?

Standing charges apply to both gas and electricity and will vary by supplier, where you live, how you pay and what meter you have. Generally, homes in more rural locations - where the gas or electricity supply has to travel further from where it’s generated - have higher standing charges.

The energy price cap, set by the energy regulator Ofgem, limits the amount a supplier can charge if you’re on a standard variable tariff.

Prices change quarterly in January, April, July and October. Check out our average bill guide for the latest rates.

When you compare energy suppliers check the prices for gas and electricity unit rates and standing charges. If you’re going direct to the supplier also check that your quote is based on the same annual consumption as often suppliers use different assumptions to generate quotes.

British Gas wants to make energy simpler and more affordable for everyone

Existing energy bills are too complicated and that needs to change. Any customer should be able to pick up their bill and easily understand how it’s calculated and how they can get help if they need it.

That’s why we’re calling for Ofgem, the energy regulator, to make the system more affordable, and easier to understand, which includes abolishing standing charges. See our story.

Do I pay a standing charge with prepayment meters?

Standing charges are included with prepayment energy tariffs where you pay-as-you-go using a prepayment meter and must still be paid even if you don’t have credit on your meter. So, when you next top up, you’ll have to pay back all the standing charges you owe.

This is something to watch out for if, for example, you don’t use any gas in Summer when the heating is off.

Do smart meters include standing charges?

If you have smart meters, you’ll still pay standing charges. They are included in the total on your Smart Energy Monitor or in-home energy display which tells you how much energy you’ve used per day, week, and month.

So even if you use no energy all day, the display will still show that you’ve been charged a small amount.

Who sets gas and electricity standing charges?

Your energy supplier sets the level of gas and electricity standing charges, based on how much it costs for maintaining the energy network, operating costs like metering and billing, and costs levied by government for energy related social and environmental policy schemes.

The energy regulator, Ofgem, limits how much suppliers can charge on a default tariff through the energy price cap.

Why do standing charges increase?

As the cost of maintaining Britain’s energy network and metered supply to your home plus government support schemes like the Warm Home Discount changes, so do standing charges – much like the rental on your mobile phone. See our average bill guide for a breakdown of what makes up your energy bills.

Here we explain the main factors that have driven more recent standing charge increases:

• Cost of failed suppliers. 29 suppliers exited the energy market during the energy crisis with total costs being shared across the remaining suppliers through the ‘Supplier of Last Resort’ process as set by Ofgem. It’s added onto the electricity standing charge as all households need electricity and doesn’t penalise households based on consumption so evenly spreads the recovery of these costs.
• Warm Home Discount scheme. Started in 2011, this is the primary government initiative to provide energy relief to vulnerable households. Like other energy related social and environmental policy schemes, it’s paid for through energy bills rather than general taxation. Additional increases came in 2022 when the government expanded the scheme to include more people.
• Network charging reforms.  The way we all pay for using the energy network has been under reform for several years. The first of many decisions came into effect in 2022 when Ofgem ruled that the costs for using and maintaining the network infrastructure (which were previously included in unit rates) would be moved to a fixed charge and collected via increased standing charges. Network costs have also been increasing because of the need to upgrade and expand our energy infrastructure plus rising costs for materials and wages.

Can I avoid paying standing charges?

You may be able to avoid paying gas and electricity standing charges if you find a zero standing charge tariff. But that probably means you’ll be paying more for each unit of gas or electricity you use and medium to high energy users may end up paying more for their energy.

As a rule, a ‘no standing charge’ energy tariff only makes sense if you use very little energy, if for example, the property is a holiday home or its empty for substantial periods.

If you’re moving home, you may be able to ask the energy provider to suspend standing charges if the property is going to be unoccupied for some time.

For longer term solutions, you may be able to get your meter disconnected or removed, but there’s costs associated, so check with your supplier.

Do I have to pay standing charges on an empty property?

The energy standing charge is a daily fee that you’ll pay every day your property has an energy connection. You’ll still be charged even if you don’t use any electricity or gas. It’s the cost of having a gas and/or electricity supply, like line rental for energy.