| Energy Bills |
Standing charges are daily fixed costs on energy bills. In late 2026, Ofgem consults on reforming them. The average dual fuel standing charge is 84.5p per day. This reform could change how these costs are distributed. Ofgem's 2026 consultation on standing charges may shift how fixed energy costs are recovered, potentially affecting the 84.5p daily dual fuel charge.
KEY FACTS
|
LAST REVIEWED 2026-09-06
What are standing charges on the energy bill?
Standing charges are fixed daily amounts that energy suppliers charge for connecting to the grid, regardless of how much energy you use. They cover costs like maintaining the network, metering, and social obligations. In Q4 2026, the average dual fuel standing charge is 84.5p per day, which is 18% of a typical bill.
These charges appear on both electricity and gas bills. For electricity, the average standing charge is 54.8p per day, and for gas it is 29.7p per day. These figures are set by Ofgem's price cap, which limits the maximum amount suppliers can charge for default tariffs.
Standing charges are separate from unit rates, which are the costs per kWh of energy used. Even if you use zero energy, you still pay the standing charge. This has led to criticism that they penalise low users, such as those in small homes or who are away often.
To understand your bill, look for the daily standing charge and the unit rate. The standing charge is multiplied by the number of days in the billing period.
Why is Ofgem consulting on standing charges in 2026?
Ofgem is consulting on standing charges reform in 2026 to address concerns that the current system is unfair. The consultation aims to explore alternative ways to recover the fixed costs of energy supply, such as increasing the unit rate instead of a daily charge.
The current structure means that low-income households, who may use less energy, still face high fixed charges. This can make it harder for them to manage bills. Ofgem is considering options like a social tariff or a higher unit rate to shift costs from fixed to variable.
The consultation is part of a wider review of the energy market. It follows changes to the price cap and the introduction of a 0% VAT rate on electricity from April 2025 to March 2027. The outcome could affect how much you pay, depending on your usage.
Ofgem's proposals are not yet confirmed. The consultation will gather evidence from consumers, suppliers, and charities. Any changes would likely take effect from 2027 or later, after the current price cap period ends.
| Fuel | Average standing charge (Oct to Dec 2026) | VAT / share | Source |
|---|---|---|---|
| Electricity | 54.8p per day | 0% VAT to 31 Mar 2027 | Commons Library |
| Gas | 29.7p per day | 5% VAT | Commons Library |
| Dual fuel | 84.5p per day | 18% of a typical bill | Commons Library |
How much are standing charges in 2026?
Under the Q4 2026 price cap, the average standing charge for electricity is 54.8p per day, and for gas it is 29.7p per day. For dual fuel customers, the combined average is 84.5p per day. These figures include VAT, which is 0% on electricity until 31 March 2027 and 5% on gas.
These charges are set by Ofgem and apply to default tariffs. They vary by region and payment method, but the averages give a benchmark. For a typical household using 2,500 kWh of electricity and 9,500 kWh of gas per year, the total bill for Oct-Dec 2026 is estimated at £1,723.
Compared to the previous quarter (Jul-Sep 2026), the typical bill has increased by 4%, from £1,663 to £1,723. This rise is partly due to changes in wholesale costs and network charges.
To see your exact standing charge, check your energy bill or your supplier's website. The price cap is reviewed every three months, so charges can change.
What is the typical annual energy bill in 2026?
For a typical dual fuel household paying by Direct Debit, the annual bill for the period Oct-Dec 2026 is £1,723. This is based on typical consumption of 2,500 kWh of electricity and 9,500 kWh of gas. This figure is set by Ofgem and is used as a benchmark.
In the previous quarter (Jul-Sep 2026), the typical bill was £1,663. That means an increase of 4% between quarters. The change reflects fluctuations in wholesale energy prices and network costs.
From 1 January 2027, the cap will be updated again, but the new level is not yet confirmed. Ofgem will announce it in late November 2026. This means the typical bill could rise or fall.
These figures are for a typical household. Your actual bill will depend on your energy usage, region, and payment method. To estimate your own bill, multiply your annual kWh usage by the unit rates and add the standing charges.
How does the standing charges reform affect the bill?
The reform could change the balance between standing charges and unit rates. If Ofgem decides to reduce standing charges, the unit rate might increase to cover the same costs. This would mean that high energy users pay more, while low users pay less.
For example, if the dual fuel standing charge of 84.5p per day were halved, the unit rate would need to rise to recover the lost revenue. The exact impact on your bill depends on your consumption. A household using 2,500 kWh of electricity and 9,500 kWh of gas per year would see a different effect than a flat with low usage.
The consultation is ongoing, and no changes have been implemented yet. Any new structure would likely be phased in to avoid sudden bill shocks. Ofgem is also considering options like a social tariff for vulnerable customers.
To prepare, monitor your usage and consider energy efficiency measures. The reform aims to make bills fairer, but the outcome is uncertain. Keep an eye on Ofgem announcements for updates.
What are the arguments for and against standing charges?
Supporters of standing charges argue they provide a stable revenue stream for suppliers, ensuring network maintenance and social programmes are funded. They also reflect the fixed costs of connecting to the grid, which are incurred regardless of usage.
Critics say standing charges are regressive, hitting low-income households and those with small homes or low energy use. For example, a pensioner living alone might pay 84.5p per day in standing charges even if they use very little energy. This can make up a large proportion of their bill.
Ofgem's consultation is exploring alternatives, such as increasing the unit rate or introducing a social tariff. A social tariff could reduce or eliminate standing charges for eligible customers, funded by a levy on other consumers.
The debate is about fairness and efficiency. The outcome will depend on the evidence submitted. No decision has been made, and any changes would be subject to further consultation.
| Cap period | Typical dual fuel, Direct Debit | Change | Source |
|---|---|---|---|
| Jul to Sep 2026 | £1,663 | Ofgem | |
| Oct to Dec 2026 | £1,723 | 4% | Ofgem |
| From 1 Jan 2027 | to be announced late November 2026 | Ofgem |
How can I reduce the standing charges?
Standing charges are set by your supplier and are regulated by Ofgem's price cap. You cannot negotiate them directly, but you can compare tariffs. Some suppliers offer tariffs with no standing charge, but these often have higher unit rates.
If you have a smart meter, you might be able to switch to a time-of-use tariff, which can lower costs if you shift usage to off-peak times. However, standing charges still apply.
For tenants, standing charges are part of the bill, and you may have limited control over the supplier. Check your tenancy agreement and speak to your landlord about energy costs. For more information, see the guide on tenant energy rights.
Reducing your overall energy usage is the most effective way to lower your bill, as it reduces the unit rate portion. But standing charges remain fixed, so they will still be a daily cost.
What is the future of standing charges after 2026?
The future of standing charges depends on the outcome of Ofgem's consultation. If reforms are approved, new arrangements could come into effect from 2027 or later. The consultation is expected to conclude in 2026, with a decision announced in early 2027.
Possible outcomes include a reduction in standing charges, a move to a social tariff, or a change in how network costs are recovered. Any changes would be designed to protect vulnerable customers and ensure a fair energy market.
From 1 January 2027, the price cap will be updated, but the new level is not yet confirmed. This will affect both standing charges and unit rates. Ofgem will announce the new cap in late November 2026.
Consumers should stay informed and consider how changes might affect their bills. For now, the current system remains in place, with average dual fuel standing charges at 84.5p per day.
How do standing charges compare to unit rates?
Standing charges are fixed daily costs, while unit rates are the costs per kWh of energy used. In Q4 2026, the average standing charge for dual fuel is 84.5p per day. Unit rates vary by region and payment method, but are typically around 24p per kWh for electricity and 6p per kWh for gas.
The balance between these two components affects how your bill changes with usage. If you use a lot of energy, unit rates dominate. If you use little, standing charges become more significant.
For a typical household using 2,500 kWh of electricity and 9,500 kWh of gas per year, the annual bill is £1,723. This includes both standing charges and unit rates.
Ofgem's reform could shift this balance. If standing charges are reduced, unit rates would rise, meaning high users pay more. This is a key consideration in the consultation.
Where can I find more information on standing charges?
For detailed statistics on average bills and price caps, see the UK Energy Bill Statistics 2026 guide. This provides historical data and projections.
If you are a tenant, the Tenant Energy Rights guide explains your rights and responsibilities regarding energy bills.
For those setting up energy in a new home, the First Home Energy Setup guide offers step-by-step advice.
Ofgem's website is the authoritative source for price cap and consultation details. You can also contact your supplier for specific information about your tariff.
Glossary: the terms on an energy bill explained
Standing charge: A fixed daily amount on energy bills that covers the cost of connecting to the grid, regardless of usage.
Price cap: A limit set by Ofgem on the maximum amount suppliers can charge for default tariffs, reviewed quarterly.
Unit rate: The cost per kilowatt-hour (kWh) of energy used, which varies by tariff and region.
Dual fuel: A single energy tariff that supplies both electricity and gas from the same provider.
Typical domestic consumption value (TDCV): A benchmark for average household energy usage, used by Ofgem to calculate typical bills.
Social tariff: A discounted energy tariff for vulnerable or low-income customers, often funded by other consumers.
Disclaimer. This guide is editorial information drawn from primary sources. It is not financial, legal or tax advice and does not recommend any provider. Figures are those published by the named sources on the review date and may change. Kael Tripton Ltd receives no commission, referral fee or lead payment from any provider named on this page. |
Frequently asked questions
What is a standing charge on the energy bill?
A standing charge is a fixed daily amount you pay for energy, regardless of how much you use. It covers the costs of maintaining the network, metering, and other fixed expenses. In Q4 2026, the average dual fuel standing charge is 84.5p per day. This is separate from the unit rate, which is the cost per kWh of energy you consume.
Why is Ofgem consulting on standing charges in 2026?
Ofgem is consulting on standing charges reform to address concerns that the current system is unfair, particularly for low-income households and low energy users. The consultation will explore alternatives such as increasing unit rates or introducing a social tariff. The outcome could change how fixed costs are recovered, but no changes have been implemented yet.
How much is the average standing charge for electricity and gas in 2026?
Under the Q4 2026 price cap, the average electricity standing charge is 54.8p per day, and the average gas standing charge is 29.7p per day. For dual fuel customers, the combined average is 84.5p per day. These figures include VAT, which is 0% on electricity until 31 March 2027 and 5% on gas.
Will standing charges be removed in 2026?
No, standing charges will not be removed in 2026. Ofgem is consulting on reform, but any changes would likely take effect from 2027 or later. The consultation is ongoing, and no decision has been made. The current system remains in place, with average dual fuel standing charges at 84.5p per day.
How can I avoid paying standing charges?
You cannot avoid standing charges on standard tariffs, but some suppliers offer no-standing-charge tariffs. These often have higher unit rates, so they may not be cheaper for everyone. To find the best deal, compare tariffs based on your usage. For low users, a no-standing-charge tariff could be beneficial, but for high users, a standard tariff might be better.
What is the typical annual energy bill in 2026?
For a typical dual fuel household paying by Direct Debit, the annual bill for the period Oct-Dec 2026 is £1,723. This is based on typical consumption of 2,500 kWh of electricity and 9,500 kWh of gas. The previous quarter (Jul-Sep 2026) was £1,663, an increase of 4%.
