The October price cap will add roughly £63 to the typical household’s annual energy bill. That is the headline. But the real story, the one that matters to every homeowner in a drafty 1930s semi or a newbuild with paper-thin walls, is that standing charges are climbing faster than the unit price of gas and electricity.
As reported by Yorkshire Live, the latest Ofgem announcement leaves many households facing “hundreds of pounds” in extra costs. The regulator’s own data shows that standing charges, the fixed daily fee you pay just to be connected, now exceed £300 a year for a typical dual-fuel customer. For a low-use household, that fixed cost can be half the total bill.
Who qualifies, and who doesn’t
Every household on a standard variable tariff is affected. Prepayment meter customers pay even higher standing charges: up to £334 a year in some regions, according to Ofgem’s December 2024 figures. The catch is that these charges are regressive. A family in a well-insulated flat using 4,000 kWh of electricity pays the same daily standing charge as a neighbour in a leaky detached house burning 12,000 kWh. The fixed fee eats a larger share of the smaller user’s bill.
Ofgem has consulted on reforming standing charges, but no changes are expected before 2026. Meanwhile, the October rise adds to the pain. The Energy Saving Trust estimates that a typical 3-bed semi with an EPC rating of D could save £200–£300 a year by upgrading to C, enough to offset the standing charge increase twice over.
What it costs a typical 3-bed semi
Take a semi-detached house in Yorkshire, gas-heated, EPC rating D, using 12,000 kWh of gas and 3,000 kWh of electricity a year. Under the new cap, that household will pay roughly £1,750 annually. Standing charges account for about £330 of that, 19% of the total. By 2026, if standing charges rise at the same rate, that share could hit 25%.
But here is the actionable bit: that same household, after installing cavity wall insulation (cost typically £500–£1,000 after the Great British Insulation Scheme grant), loft insulation top-up (£300–£500), and draft-proofing (£100–£200), could cut gas use by 25%. That saves £200 a year on usage, while the standing charge stays the same. The insulation pays for itself in three to five years.
Heat pumps and solar as a hedge
Heat pumps and solar panels offer a different kind of protection. A heat pump running on grid electricity still pays the electricity standing charge, but it cuts gas usage to zero, eliminating the gas standing charge entirely. Solar panels reduce the amount of electricity you buy from the grid, so the standing charge becomes a smaller fraction of your total outlay.
Under the Boiler Upgrade Scheme, homeowners get a £7,500 grant toward a heat pump. The Energy Saving Trust says a typical 3-bed semi could save £300–£500 a year on heating bills after switching. That saving grows if standing charges keep rising, because the heat pump user avoids the gas standing charge and buys less electricity overall.
What you can do now
The October price cap takes effect on 1 October. Households on standard variable tariffs can lock in a fixed-rate tariff now, some fixed deals are cheaper than the new cap, though they rarely beat it by more than £50 a year. But the bigger lever is fabric efficiency. Check your EPC rating on gov.uk. If it is D or below, apply for the Great British Insulation Scheme before the grant budget runs out. Applications close when funds are exhausted, not on a fixed date.
For those considering a heat pump, the Boiler Upgrade Scheme grant is available until March 2028, but installer lead times are already stretching to 12 weeks in some regions. Book a survey now. The standing charge will not fall on its own, but your dependency on it can.
Frequently Asked Questions
Ofgem consulted on a social tariff and standing charge reform in 2024, but no changes are expected before 2026. In the meantime, the best way to reduce the impact is to cut your usage so the fixed fee becomes a smaller share of your total bill.
Standing charges are set by Ofgem's price cap, so they are similar across all suppliers for standard variable tariffs. Some fixed-rate deals may have slightly different standing charges, but the difference is usually small, under £20 a year. Switching is still worth it if you find a cheaper unit rate.
