Four major energy suppliers—British Gas, EDF, E.ON, and Octopus—will scrap or reduce standing charges for up to 150,000 households as part of a new trial starting this April. The average UK household currently pays over £300 per year in standing charges, a fixed daily fee regardless of energy usage.
Under the trial, tariffs will cut at least £150 off the annual standing charge bill. However, these tariffs will not be covered by the Ofgem price cap, meaning unit rates for gas and electricity will not be capped. This could result in higher costs per unit of energy used.
Eligibility criteria vary by supplier. Octopus requires a minimum yearly usage level, EDF demands at least 666kWh of electricity and 2,836kWh of gas annually, and E.ON insists on a smart meter and direct debit payment. More details are expected in the coming weeks.
Ben Gallizzi, energy expert at Uswitch, advised consumers to compare prices before joining the scheme. “If more low standing charge tariffs become available, it will still be really important that consumers compare them with the fixed deals available to them, as lower usage households are likely to save more by choosing the most competitive tariffs available,” he said.
From April, the Ofgem price cap will drop from £1,758 to £1,641 for a typical dual-fuel household. However, analysts at Cornwall Insight predict a 10% rise from July, potentially pushing the cap to £1,801, driven by higher wholesale gas prices linked to the Middle East conflict.
