Standing charges on energy bills are common – but they aren’t exactly welcome. In this guide, you will find out all you need to know about standing charges. This guide also examines why consumers pay standing charges.
What are standing charges?
Standing charges are fixed costs. Energy suppliers set their own standard charges so yours may be different to somebody else’s. These costs commonly cover the costs associated with bringing energy to your home or place of business – such as connecting you to the energy network, infrastructure maintenance and improvements and meter readings. Part of your standing charges also go towards government initiatives.
Are standing charges a rip off?
Anything that bumps up the total cost of your energy should be scrutinised, however standing charges aren’t typically considered to be a rip off. They pay for the fixed costs that your energy supplier will encounter and as your energy supplier is a business, standing charges are designed to cover these. Most standing charges are low and so they should not overly affect the total cost of your energy in the long-term.
What are the rules with standing charges?
As of 2013, all energy tariffs had to have a standing charge. Yet ridiculously, this charge can be set to £0. There is no set cost for standing charges however by examining the standing charges of 15 energy tariffs in the UK in early 2015, we found the average cost to be typically 15p-40p/day for gas and 10p-30p/day for electricity. These costs are relatively high, however there is a method around them – this is detailed below.
How do I pay no standing charges?
You only have one option if you wish to not pay standing charges – switch to or take out an energy tariff with standard charges set to £0. All energy tariffs have standing charges but there are tariffs out there with the amount set to NIL. At present, only a few energy suppliers are offering such tariffs – Ebico and Utilita are the independents and npower is the only supplier offering this out of the big six, albeit for electricity only.
Is it worth switching to a tariff with no standing charges?
There’s more to think about than just standing charges when switching – you must get quotes from several suppliers to see whether or not savings from standing charges will amount to energy bill savings in the long-term. We recommend reading our how to switch guide for more information about this. It’s also worth considering that you may save money by opting for a dual fuel tariff with higher standing charges.
Another thing to consider is that no standing charge tariffs are not for everyone. If you live in a home with a high energy usage, for example, you can expect to pay more for each unit of energy you use on a no standing charge tariff. And so, no standing charge tariffs may be the best option for you if your home uses little or no energy for 9 months of the year, or if you have the opportunity to choose a different supplier for certain areas of your home that don’t require a huge amount of energy, such as your garage or another outbuilding.
Is a no standing charge tariff right for me?
No standing charge tariffs are best suited to those with low or sporadic energy needs. For example, you may choose a no standing charge tariff if you are buying energy for a holiday home or a second home – or to power an outbuilding. If you have such requirements, we recommend giving your energy supplier a call to discuss. They may or may not offer no standing charge tariffs – but there are plenty of those that do, so be sure to shop around.
