What is the standing charge in the Ofgem energy price cap and why do I pay it?

Full answer

Every domestic energy bill under the Ofgem price cap is made up of two separate charges: a standing charge, which is a fixed amount charged every single day regardless of how much gas or electricity is used, and a unit rate, charged per kilowatt hour (kWh) of energy actually consumed. Under the April-June 2026 price cap, the daily standing charge is 57.21p for electricity and 29.09p for gas, meaning a dual-fuel household pays roughly 86.30p a day, or around £315 a year, purely in standing charges before a single unit of energy is used -- on top of that, unit rates of 24.67p per kWh for electricity and 5.74p per kWh for gas apply to actual consumption. The standing charge exists because a meaningful share of the cost of supplying energy is fixed and does not vary with how much a household uses: maintaining the national gas and electricity networks, meter reading and maintenance, supplier operating costs, and various government policy costs (such as funding for renewable energy schemes and the Warm Home Discount) are largely charged this way. This structure has been controversial, since a low-usage household -- for example, someone who is away for long periods, lives alone, or has very energy-efficient appliances -- still pays the full standing charge every day even if their unit consumption is minimal, meaning standing charges make up a proportionally larger share of the bill for low users than for high users. Ofgem has reviewed alternative structures, including moving some standing charge costs into unit rates instead, but the core two-part structure (fixed standing charge plus variable unit rate) has remained in place through successive price cap periods. If you switch supplier or move house, your standing charge is charged per property and per fuel type, so a household with only electricity (no mains gas connection) pays only the electricity standing charge, not both. Use the energy bill calculator to see how standing charges and unit rates combine to make up your annual bill.

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