Ofgem will announce next week that the October energy price cap holds unit rates flat, yet millions of households will still pay more. The culprit is the standing charge, the fixed daily fee that covers network costs, meter reading, and supplier overheads. For a typical dual-fuel household on a standard variable tariff, the standing charge is rising by roughly 12% in some regions, adding £30–£50 a year to bills regardless of how little energy you use.
As reported by Wales Online, the headline figure, that the cap “won’t go up”, masks a structural shift in how households are charged. The standing charge now accounts for about 20% of a typical dual-fuel bill, up from 14% two years ago. For a 1-bed flat using 1,800 kWh of electricity and 7,500 kWh of gas, the standing charge can represent over a third of the total bill.
Who qualifies, and who doesn’t
The October cap applies automatically to households on standard variable tariffs, about 28 million homes. Those on fixed deals are unaffected until their contract ends. But the standing charge rise hits everyone on default tariffs equally, regardless of whether you heat your home to 20°C or 15°C. Ofgem has said it is reviewing the standing charge structure, but no changes are expected before 2026.
Energy Saving Trust data shows that low-usage households, often pensioners or single occupants, are the hardest hit. A pensioner living alone in a well-insulated flat might use only 1,500 kWh of electricity a year. Their standing charge at the new rate would be about £180 a year, more than half their total bill. The unit rate reduction offers them almost no benefit.
What it costs a typical 3-bed semi
For a typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity, the October cap means unit rates of roughly 24p/kWh for electricity and 6p/kWh for gas, unchanged from July. But the daily standing charge rises from 53p to 59p for electricity and from 29p to 32p for gas, depending on region. That adds about £35 a year to the bill.
Yet the real sting is for households who have already cut usage. If you installed loft insulation and reduced your gas consumption by 15%, you saved £108 on unit costs, but the standing charge still went up. The message from Ofgem’s own impact assessment is clear: energy efficiency now has to work harder to offset fixed costs.
What homeowners can do now
The standing charge is not negotiable, you cannot switch supplier to avoid it, because all major suppliers use the same regional rates set by Ofgem. But you can reduce the proportion of your bill eaten by standing charges by increasing self-generation or reducing unit consumption further.
Solar panels, for example, cut your electricity unit consumption directly. A typical 4 kW system in the South of England generates about 3,400 kWh a year, enough to cover most of a 3-bed semi’s usage. At current unit rates, that saves about £800 a year in electricity costs. The standing charge remains at £180, but now represents only 18% of your total bill instead of 20%, and your overall bill is lower.
Heat pumps offer a similar logic. By replacing a gas boiler, you eliminate gas standing charges entirely. A typical air-source heat pump installation costs £7,000–£13,000 after the Boiler Upgrade Scheme grant, and saves about £300–£400 a year on gas bills. The electricity standing charge still applies, but your total energy spend drops.
The catch is that these upgrades require upfront capital. For households who cannot afford them, the standing charge rise is a regressive tax on energy connection itself. Ofgem’s review of standing charges is due to report by summer 2025. Until then, the only lever households have is to reduce the unit consumption that sits on top of those fixed fees.
3 Key Takeaways
- Standing charges are rising by £25–£40 a year for typical households, even if you use no energy at all.
- Unit rates for electricity and gas are broadly unchanged from July’s cap, but regional variation means some see small increases.
- Low-income and low-usage households are disproportionately affected by the standing charge rise, insulation and solar self-generation now pay back faster.
Frequently Asked Questions
Can I switch supplier to avoid the standing charge increase?
No. All major suppliers use the same regional standing charges set by Ofgem. Switching supplier does not change the standing charge, it is the same for every tariff on the same network.
Will the standing charge review reduce my bills?
Ofgem is reviewing the standing charge structure, with a report expected by summer 2025. Options include shifting some costs to unit rates or introducing a social tariff for low-income households. No changes are expected before then.
