Ofgem standing charge split tariff consultation explained
Understand what Ofgem’s “split standing charge” tariff consultation could mean for your household bills — and compare whole-of-market home energy deals with EnergyPlus in minutes.
- Plain-English overview of the proposal and why it’s being considered
- Who could pay less or more (and why usage patterns matter)
- Actionable steps to protect your budget now (even before any change)
Home energy only. We’re a comparison service (whole-of-market approach). Availability and prices vary by postcode and payment method.
What is Ofgem’s split standing charge tariff idea?
A standing charge is the fixed daily amount you pay for being connected to the gas and/or electricity network — separate from the unit rate (the price per kWh). It helps cover costs like maintaining the network, meter operation and certain policy costs.
Ofgem’s standing charge split tariff consultation explores whether some households should be able to choose a tariff that reduces the standing charge but may have a higher unit rate. In other words, it could shift how your bill is balanced between fixed daily costs and usage-based costs.
Key point: A split standing charge tariff isn’t automatically “cheaper” — it depends on how much energy your household uses and which tariff you’re on today.
Standing charge vs unit rate (quick definition)
| Bill element | What it is | How it affects you |
|---|---|---|
| Standing charge | A daily fixed cost for supply and network-related charges | You pay it even if you use very little energy |
| Unit rate | The price per kWh of gas/electricity you use | Higher usage means a larger bill impact |
If Ofgem allows more tariffs with a lower standing charge, suppliers may recover those fixed costs by increasing the unit rate. Your best option depends on your usage profile.
Compare home energy tariffs now (whole-of-market)
Whether or not Ofgem’s proposals go ahead, you can still reduce costs by choosing a tariff that matches how your home uses energy. Use the form to compare options for your postcode, meter type and payment method.
- See tariffs with different standing charge vs unit rate balances
- Check fixed and variable options from across the market
- Support for standard credit, Direct Debit and (where available) prepayment
Why is Ofgem consulting on standing charges?
In recent years, standing charges have been a major pain point for many UK households — particularly for people who use less energy, live in smaller homes, spend time away, or try to keep usage low. Ofgem’s consultation looks at whether consumers should have more choice in how these costs are recovered.
Affordability and fairness
A high fixed daily charge can feel unfair if you’re using very little energy, because the “minimum bill” stays high.
Clearer price signals
Changing the split between fixed and usage-based costs can alter incentives — including saving energy and shifting demand.
More tariff choice
A “split” approach could offer an option for low users while keeping a more traditional tariff for higher users.
Important: A consultation is not an immediate rule change. Timescales, eligibility and tariff structures can evolve based on feedback and implementation constraints.
Who could pay less (and who could pay more)?
If a tariff has a lower standing charge but a higher unit rate, the outcome depends mainly on how many kWh you use. Below is a practical way to think about it.
More likely to benefit from a lower standing charge
- Low energy users (smaller flats, efficient homes, careful consumption)
- Households who are often away from home
- People who’ve already reduced usage but still feel bills are “stuck”
- Some prepayment customers, depending on what suppliers offer
More likely to lose out if unit rates rise
- High energy users (larger homes, electric heating, more occupants)
- Households with limited ability to reduce usage (health needs, insulation constraints)
- Homes with higher day-to-day demand where kWh cost dominates
- Anyone currently on a low unit rate who would face a sharp increase
Rule of thumb: Lower standing charge helps most when you use fewer kWh. Higher unit rates hurt most when you use lots of kWh. The “break-even” point is different for every tariff.
How to prepare now (regardless of the consultation outcome)
You don’t need to wait for policy changes to make smart tariff decisions. These steps help you choose the right balance between standing charge and unit rate for your household.
-
Check your annual usage (kWh), not just your monthly spend.
Use your bill, online account or smart meter history. Usage is the key input for comparing tariff structures. -
Separate fixed costs from consumption.
Multiply the standing charge by 365 to estimate your yearly fixed cost, then compare it with your usage cost. -
Compare like-for-like tariffs by postcode and payment method.
Prices vary by region and how you pay. Comparing with accurate details avoids misleading “headline” savings. -
Consider seasonal swings.
If your gas usage spikes in winter, a slightly higher unit rate can cost more than you expect. -
Review extras that impact real cost.
Things like exit fees (for fixed deals), warm home discounts eligibility, or smart meter requirements can affect suitability.
Common mistakes when comparing standing charges
Looking at standing charge in isolation
A low standing charge can come with a unit rate increase that outweighs the saving for medium/high usage homes.
Using old usage figures
If you’ve changed working-from-home patterns, household size or heating habits, update your kWh assumptions.
Missing regional price differences
Standing charges and unit rates vary by region. Always compare using your postcode for accurate results.
Regional considerations across Great Britain
Standing charges and unit rates can differ depending on your electricity distribution region and gas network area. That’s one reason why a split standing charge option (if introduced) may not feel the same everywhere.
| Factor | Why it matters | What to do |
|---|---|---|
| Distribution region | Network costs vary by region, influencing standing charges and unit rates | Compare with your postcode, not national averages |
| Meter type | Single-rate vs Economy 7 (and other multi-rate) affects unit rate structure | Check if you can benefit from off-peak rates, especially with electric heating |
| Payment method | Direct Debit tariffs can differ from standard credit/prepayment | Compare using your real payment method for accurate pricing |
FAQs: split standing charges and your home energy bill
Will standing charges be scrapped?
The consultation explores options such as offering alternative tariff structures (for example, lower standing charge with higher unit rates). It does not guarantee standing charges will be removed entirely.
Could a split standing charge tariff make bills more predictable?
It could make the “fixed” part smaller, but the trade-off may be greater variability because more of the bill depends on how many kWh you use.
Does this affect the Energy Price Cap?
The price cap limits what suppliers can charge typical customers on default tariffs (based on unit rates and standing charges). If tariff structures change, Ofgem would consider how consumer protections apply.
What about prepayment meters?
Options and pricing can be different for prepayment customers. Compare using your exact meter and payment setup to see what’s available in your area.
If I’m a low user, should I wait for new tariffs?
Not necessarily. There are already tariffs with different cost balances. The best move is to compare based on your annual usage and current rates, then decide if switching suits you.
How do I know my break-even point?
You can estimate by comparing the standing charge difference across a year against the unit rate difference multiplied by your expected kWh. Our comparison results help you weigh real tariff costs for your postcode.
If you’re unsure what’s on your current tariff, start with your latest bill: look for “standing charge (p/day)” and “unit rate (p/kWh)”. Then compare tariffs using your postcode.
What households say about switching with comparisons
Social proof matters most when it’s specific. Here are typical outcomes people look for when comparing standing charges and unit rates.
“I didn’t realise the standing charge added up to hundreds a year. Comparing by postcode helped me find a deal that suited my low usage.”
“We use a lot of electricity, so chasing the lowest standing charge didn’t help. The comparison made it clear the unit rate mattered more for us.”
“It was helpful seeing fixed vs variable options side-by-side. I could choose what felt safest for my budget.”
Trust signals: Whole-of-market comparison approach, postcode-accurate pricing, and tariff suitability based on how you pay and your meter type.
Ready to see which tariff fits your usage?
Get personalised home energy comparisons for your postcode and payment method. It’s the quickest way to judge whether a lower standing charge or lower unit rate matters most for your household.
Switching is optional and always confirmed by you. Prices and availability depend on your details and market conditions.
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