Ofgem standing charge reform 2026: who will save?
Ofgem is exploring reforms to electricity and gas standing charges from 2026. Use this guide to understand who may benefit, who may pay more, and how to protect your household by comparing whole-of-market tariffs with EnergyPlus.
- Learn what standing charges are and why they’re changing
- See which households are most likely to save (and why)
- Get a personalised comparison in minutes (home energy only)
We compare whole-of-market options available through our service. Estimates are indicative and depend on usage, region and tariff availability.
Check your options before 2026: compare whole-of-market tariffs
Standing charge reform is about how fixed costs are recovered on your bill. Even before any changes arrive, you can often cut costs by switching to a tariff that better matches your usage pattern (low, medium or high). EnergyPlus helps you compare whole-of-market home energy options available through our service, so you can make a confident decision.
Good to know: Ofgem’s proposals may evolve. This page explains the likely impacts and the household types that are typically favoured when standing charges fall and unit rates rise (or the reverse).
What you’ll need
- Your postcode (for regional price caps and network costs)
- Whether you’re paying by Direct Debit / on receipt of bill / prepayment (if applicable)
- Approximate annual usage (or just your current supplier details — we’ll still help you compare)
What is Ofgem’s standing charge reform (and why 2026 matters)
Your energy bill is usually made up of two main parts:
- Unit rate (pence per kWh): what you pay for the energy you use.
- Standing charge (pence per day): a fixed daily amount covering costs such as the network, metering and some policy costs.
Ofgem has been exploring options to re-balance these charges. While the final design may change, the broad debate is about whether more costs should be recovered through the unit rate (usage-based) rather than the standing charge (fixed). If changes take effect in 2026, some homes could see meaningful shifts in how their bill is distributed across the year.
Why standing charges are controversial
- They apply even if you use very little energy.
- They can feel punitive for low-usage households (e.g., small flats, single occupiers).
- They can reduce the benefit of saving energy or installing efficiency measures.
What reform could look like
- Lower standing charge (fixed part reduced)
- Higher unit rate (more cost per kWh)
- Potentially different approaches for electricity vs gas
If you’re trying to forecast your household impact, the key question is: do you use less energy than a typical home in your region? If yes, you’re often the kind of household that benefits when fixed charges fall. If you use more than average, the opposite can be true.
Who will save if standing charges reduce in 2026?
Exact winners depend on the final Ofgem design and tariff pricing. But if reform reduces the standing charge and shifts recovery into the unit rate, households that use below-average energy are typically more likely to save.
Low-usage homes
If you’re out during the day, heat only when needed, or run fewer appliances, lowering the fixed daily cost can make your bill reflect your usage more fairly.
Small households & flats
Single occupiers and smaller properties often consume less overall. When standing charges fall, a higher share of what you pay becomes controllable through usage.
Homes prioritising efficiency
If you’ve improved insulation, upgraded heating controls, or reduced consumption, reform may increase the financial reward for using fewer kWh.
Tip: Even if you expect to save under reform, you don’t need to wait. Switching to a tariff that suits your household now can reduce your bill immediately. Compare tariffs here.
Who might pay more (and what to do about it)
If a lower standing charge is offset by a higher unit rate, households with higher consumption could see costs rise. This doesn’t mean you’ll definitely pay more in 2026 — it means it’s worth planning for sensitivity to unit rates.
Households more exposed to unit rates
- Larger families with higher day-to-day consumption
- Electrically heated homes (e.g., storage heaters, panel heaters)
- Homes that charge an EV primarily at home (especially without off-peak optimisation)
- Households using more energy due to health needs
Practical steps to protect your bill
- Know your usage: check kWh on your bill (electricity and gas).
- Compare with your postcode: network costs vary by region.
- Review tariff type: fixed vs variable, and any smart/off-peak options.
- Reduce peak consumption: where possible, shift flexible usage.
If you’re concerned you’ll be worse off, the most effective move is usually to review your current tariff against the market and consider whether a fixed tariff provides cost stability while the industry reforms develop.
Example scenarios: who saves when standing charges fall?
These examples show the direction of travel under a common reform idea: standing charge decreases and unit rate increases so the overall revenue is broadly similar. Figures are illustrative only — your outcome depends on your tariff, region and usage.
| Household type | Typical usage pattern | Likely impact if standing charge falls | Best next step |
|---|---|---|---|
| Single occupier in a flat | Low day-to-day consumption; limited heating time | Often benefits as fixed costs reduce | Compare tariffs that don’t penalise low usage |
| Couple working outside the home | Moderate usage; evenings/weekends higher | Could be neutral to slightly positive | Check fixed vs variable; watch unit rates |
| Family home with high usage | High cooking, laundry, hot water and heating use | Can be worse off if unit rates rise | Compare carefully; consider usage reduction plan |
| EV driver charging at home | Higher electricity usage, often overnight | Depends heavily on off-peak pricing; could be mixed | Compare smart/off-peak tariffs where eligible |
Reality check: Not all suppliers price standing charges and unit rates the same way across regions. That’s why postcode-based comparison matters.
How standing charges work on UK home energy bills
Standing charges are typically shown as a daily rate (p/day). Over a year, that adds up — even if your kWh usage is low. Electricity and gas standing charges differ, and they can also vary by region due to network costs.
What the standing charge can cover
- Local and national energy network costs
- Metering and billing costs
- Some policy and operating costs (varies by approach)
- Maintaining supply infrastructure regardless of usage
Why it changes over time
- Ofgem price cap updates (where applicable)
- Wholesale market conditions and supplier costs
- Network investment and regional charges
- Shifts in how costs are allocated (reform)
A simple way to think about reform
- Lower standing charge = lower fixed cost for everyone.
- Higher unit rate = higher cost per kWh.
- Net effect depends on your usage: the less you use, the more you tend to benefit.
If you don’t know your annual kWh, check your latest bill or your online account. You can still compare without perfect numbers — but the closer your estimates, the better the match.
Regional considerations: why your postcode matters
Standing charges and unit rates aren’t identical across the UK. Regional network costs mean two homes with the same usage can pay different amounts depending on where they live.
Different network areas
Electricity distribution regions and gas networks influence the baseline costs recovered through bills.
Tariff availability varies
Some tariffs and discounts are offered differently depending on location, meter type and supplier.
Local usage patterns
Heating needs and property types differ across the UK, affecting whether a usage-based bill helps or hurts.
Action: Use your postcode in our form to see options that reflect your area’s charges. Go to comparison form.
Common mistakes when judging standing charge reform
Mistake: focusing on one number
A lower standing charge sounds good, but a higher unit rate can outweigh it if you use a lot of kWh. Always check annual cost using your typical usage.
Mistake: assuming reform is identical everywhere
Regional charges vary. A change that helps in one area may be neutral elsewhere. That’s why postcode-based comparison is essential.
Mistake: ignoring electricity vs gas differences
Your gas and electricity bills may move differently depending on how reform is applied. Consider each fuel separately — then look at the combined annual impact.
Mistake: waiting for 2026 to act
Tariff pricing changes all year round. If your current deal is poor value, switching sooner may save more than any future reform.
FAQs: Ofgem standing charge reform 2026
Will standing charges definitely be reduced in 2026?
Not guaranteed. Ofgem has explored options and consulted on approaches, and details can change. The best approach is to understand how different structures affect your household, then compare tariffs based on your current situation.
If standing charges go down, will unit rates always go up?
Often, yes — if the same overall costs still need to be recovered. A lower fixed charge usually means a higher variable cost (p/kWh), though the exact balance depends on the final rules and supplier pricing.
Who benefits most from lower standing charges?
Typically, low-usage households — for example, single occupiers, smaller homes, or households that have cut consumption through efficiency measures.
Could vulnerable households be worse off?
It depends on usage. Some households with higher essential usage (for health reasons, for example) could be more exposed if unit rates rise. If you’re concerned, consider tariff stability (e.g., fixed deals) and get a personalised comparison using your postcode and typical usage.
Does this apply to business energy?
This guide is for UK home energy. Business energy pricing and contracts work differently.
What can I do today to prepare for reform?
Start by checking your annual electricity and gas usage (kWh), then compare whole-of-market tariffs based on your postcode. If your current tariff has a high standing charge, it may be worth seeing alternatives now. Use our comparison form.
Why households use EnergyPlus
Whole-of-market comparison
We help you review a broad range of home energy options available through our service, so you can focus on value, not just headline rates.
Postcode-accurate results
Regional standing charges and unit rates matter. We start with your postcode to keep comparisons relevant.
Clear guidance, no jargon
We explain the trade-offs (standing charge vs unit rate) so you can choose based on how your household actually uses energy.
What people say
“The comparison was straightforward and the explanation of standing charges helped me understand my bill properly.”
Home energy customer, UK
“I didn’t realise how much my daily charge added up. Comparing by postcode made it much clearer.”
Home energy customer, UK
Want to know if you’ll likely save under 2026 reform?
Get a personalised, postcode-based comparison and see tariffs that may suit your usage pattern now — plus what to watch if standing charges change.
EnergyPlus.co.uk provides a home energy comparison service. Savings are not guaranteed and depend on tariff eligibility, availability, and your household usage.
Back to Guides & FAQs