Guide to UK standing charges vs unit rates for home energy
Understand exactly what you are paying for on your gas and electricity bills, how standing charges and unit rates work, and how to choose the right home energy tariff for your household.
Paying too much for your home energy?
Every UK home energy bill is built from two main ingredients: a daily standing charge and a per-unit price for the energy you actually use, called the unit rate. Small changes in either of these can make a big difference to what you pay across the year.
This guide breaks down standing charges and unit rates in plain English, shows how they affect different types of households, and explains how to use this knowledge to cut your gas and electricity costs.
- See what you really pay each day before you use any energy
- Compare tariffs fairly using both standing charges and unit rates
- Find out which type of tariff suits low, average, and high users
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What are standing charges and unit rates?
Standing charge (daily fee)
A standing charge is a fixed amount you pay each day for having a gas or electricity supply connected to your home, no matter how much energy you actually use.
It is shown on your bill as a daily cost in pence per day (p/day) and is added for every day in the billing period.
Standing charges are meant to cover things like:
- Maintenance of pipes, cables and meters
- Network and infrastructure costs
- Customer service and billing
- Government schemes and environmental obligations
Even if you go on holiday or hardly use any gas or electricity, the standing charge will still appear on your bill.
Unit rate (price per kWh)
The unit rate is what you pay for each unit of energy you actually use, measured in kilowatt hours (kWh).
On your bill you’ll normally see this as pence per kWh (p/kWh). The more units you use, the higher this part of your bill will be.
Your unit rate can vary depending on:
- Your tariff type (fixed vs variable)
- Where you live in the UK
- Whether you pay by direct debit, on receipt of bill, or via prepayment meter
- Single-rate vs Economy 7 / multi-rate meters
Reducing your energy usage mainly reduces the unit rate part of your bill.
How standing charges and unit rates work together
Your total home energy bill is a combination of your standing charges and your usage at the unit rate. A simple way to think of it is:
Energy cost = (Standing charge per day × number of days) + (Unit rate × kWh used)
That means:
- Standing charge is like a subscription fee just to be connected.
- Unit rate is like paying per item or per minute you use.
Two tariffs can look very similar on unit rate, but if one has a much higher standing charge it could cost you a lot more over a year – especially if your usage is low. Equally, a slightly higher standing charge with a noticeably lower unit rate can be better value for high-usage households.
Example monthly bill breakdown
Illustrative figures only. Your actual charges will depend on your supplier, tariff and region.
| Billing period | 30 days |
|---|---|
| Electricity standing charge | 50p per day |
| Electricity unit rate | 28p per kWh |
| Electricity used | 250 kWh |
| Standing charges total | £15.00 |
| Usage cost total | £70.00 |
| Monthly electricity cost | £85.00 |
Who benefits from low standing charges vs low unit rates?
Whether you should focus on a low standing charge or a low unit rate depends mainly on how much energy your household uses. Below are some typical situations to help you decide where to focus when comparing tariffs.
Low-usage homes
e.g. single-occupancy flats, second homes, holiday lets
- Often use very little gas or electricity.
- Standing charges make up a large chunk of the bill.
- A lower standing charge can save more than a slightly lower unit rate.
Tip: Look for tariffs marketed for low users and always check daily standing charges first.
Average-usage families
e.g. typical UK households using gas for heating
- Both standing charge and unit rate are important.
- The best tariff is usually a balance of the two.
- Seasonal use (more in winter) can magnify unit rate costs.
Tip: Compare the estimated annual cost, not just individual prices, to see the bigger picture.
High-usage homes
e.g. large families, electric heating, EV charging
- Most of the bill comes from kWh usage.
- A lower unit rate can outweigh a slightly higher standing charge.
- Economy 7 or time-of-use tariffs may help if you can shift usage.
Tip: Run a quick calculation based on last year’s kWh use to see which tariff wins overall.
How to compare two tariffs in 3 quick steps
- Find your annual usage
Check your latest bill for yearly kWh figures for gas and electricity. - Write down standing charges & unit rates
Note the daily standing charge and unit rate (p/kWh) for each tariff. - Estimate annual cost
Multiply daily standing charge by 365 and add your kWh usage multiplied by the unit rate.
Most comparison tools do this for you automatically, but understanding the calculation helps you spot which tariffs are genuinely good value.
Worked comparison (illustrative only)
Assume 3,100 kWh electricity per year.
| Tariff A | Tariff B | |
|---|---|---|
| Standing charge | 60p/day | 45p/day |
| Unit rate | 27p/kWh | 30p/kWh |
| Annual standing charge | £219.00 | £164.25 |
| Annual usage cost | £837.00 | £930.00 |
| Estimated annual bill | £1,056.00 | £1,094.25 |
Even though Tariff A has the higher standing charge, its lower unit rate makes it around £38 cheaper per year for this usage level.
What are typical UK standing charges right now?
Standing charges in the UK have changed significantly over recent years. The exact amounts you pay will depend on your region, meter type and supplier, and are also influenced by the Ofgem energy price cap for standard variable tariffs.
As a general guide, you might see:
- Electricity standing charges in the region of several tens of pence per day.
- Gas standing charges slightly lower, also charged daily.
- Prepayment meters often having higher standing charges and unit rates than direct debit tariffs.
These figures change regularly. Always refer to your supplier’s latest tariff information or a trusted comparison service for up-to-date numbers for your area.
Are there tariffs with no standing charge?
So-called no standing charge tariffs used to be more common and occasionally still appear. Instead of a daily fee, the cost is built into a higher unit rate.
These can sometimes work for properties that sit empty for long periods, but they are usually not the cheapest option for normal homes.
If you see a tariff advertised with no standing charge:
- Check how much higher the unit rate is compared to other tariffs.
- Run the numbers using your actual annual kWh usage.
- Make sure there are no extra fees or minimum usage conditions.
Pros and cons of no-standing-charge tariffs
Potential advantages
- Can reduce costs for very low-usage or empty homes.
- No daily cost when you switch everything off.
- Simpler to understand if you only use a few units a month.
Potential disadvantages
- Higher unit rates can quickly outweigh savings.
- Often poor value for average and high-usage households.
- Fewer suppliers offer them, reducing choice.
How payment type and meter type affect your charges
Direct debit vs pay on receipt
Paying by monthly direct debit is usually cheaper than paying when you receive your bill.
- Suppliers often offer discounts for direct debit.
- Standing charges and unit rates may both be lower.
- Spreads your costs evenly over the year.
Credit meters vs prepayment meters
Households with prepayment meters (topping up with a card, key or app) often face higher standing charges and unit rates than those with standard credit meters.
If you are on prepay and can safely move to a credit meter, you may be able to cut your costs.
Smart meters & time-of-use tariffs
With a smart meter, some suppliers offer time-of-use tariffs where unit rates change throughout the day.
- Off-peak periods can be significantly cheaper.
- On-peak periods may be more expensive.
- Good for EV charging or running appliances overnight.
Practical tips to keep your home energy bill down
While you cannot control standing charges directly, you can choose a tariff that keeps them reasonable for your usage, and you can reduce the unit-rate part of your bill by using less energy.
1. Choose the right tariff for your usage
- Low users: prioritise a lower standing charge.
- High users: focus on securing the best unit rate.
- Everyone: look at the estimated annual cost, not just the headline price.
2. Track your actual usage
- Submit regular meter readings or use your smart meter app.
- Check for sudden changes that could indicate a fault or an appliance issue.
3. Improve efficiency at home
- Insulate lofts and draught-proof doors and windows.
- Use thermostats and radiator valves effectively.
- Swap to LED lighting and efficient appliances where possible.
4. Review your tariff regularly
- Check for new fixed-rate deals when your contract nears its end.
- Look at both standing and unit rates whenever you compare.
Ready to see if you can save?
Use your postcode and a rough idea of your usage to explore home energy tariffs that suit your household.
Frequently asked questions about standing charges
Why do I pay a standing charge even when I use no energy?
The standing charge pays for keeping your home connected to the gas and electricity networks, maintaining pipes and cables, managing meters and providing customer service. These costs exist even when you are away or using no energy, which is why the fee is charged daily rather than per unit used.
Can I avoid paying a standing charge completely?
Some tariffs may have no standing charge, but the cost is then built into a higher unit rate. For most households, this works out more expensive overall. If a property is permanently disconnected from the network and the meter is removed, you would no longer pay a standing charge – but you would also have no supply.
Why are standing charges different around the UK?
Your standing charge includes costs from local electricity distribution and gas network operators. These costs vary between regions because infrastructure, maintenance and investment requirements differ. As a result, two homes with the same usage can have slightly different bills depending on where they live.
How does the Ofgem price cap affect standing charges?
The Ofgem price cap sets a maximum a supplier can charge for energy on a standard variable tariff, including standing charges and unit rates. Suppliers can still choose different mixes of standing charge vs unit rate within that cap, which is why it is important to look at both when comparing tariffs.
What happens to my charges if I get a smart meter?
Getting a smart meter does not automatically change your standing charge or unit rate, but some tariffs are only available to households with smart meters. These may include time-of-use deals where off-peak unit rates are lower. Check the full tariff details before you switch.
Can I negotiate my standing charge with my supplier?
Suppliers generally set standing charges at tariff level and do not negotiate them on an individual basis. Your main way to influence what you pay is to choose a different tariff or supplier that offers a more suitable combination of standing charge and unit rate for your usage.
Check your standing charges and unit rates today
Understanding how standing charges and unit rates work is the first step. The next is to see what you are paying now and whether a different tariff could reduce your home energy bills.
It only takes a couple of minutes to see how your current standing charges and unit rates compare with other UK home energy deals.
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