Ofgem standing charge: UK gas and electricity bills could change in 2026 with lower daily fees - with a catch
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Households could soon pick energy tariffs with smaller daily fees, giving more flexibility ⚡
- Ofgem plans to make energy suppliers offer at least one tariff with a lower standing charge by January
- Standing charges are daily fees applied regardless of energy use, often hitting low-usage households hardest
- Zero-standing-charge tariff plans were scrapped to avoid disadvantaging high-energy households
- New tariffs may shift costs into unit rates, so bills aren’t guaranteed to fall
- Final consultation is open now, with a decision expected by the end of the year
UK households could soon see more choice in how they pay for energy, with regulator Ofgem confirming its plans for suppliers to offer at least one tariff with a lower standing charge by the end of January.
While the regulator has stopped short of eliminating fixed daily costs entirely, the move could change the way many Brits approach their energy bills.
Standing charges are daily fees added to energy bills regardless of usage. They cover essential costs such as maintaining the electricity network, keeping the lights on if suppliers go bust, and investing in new infrastructure.
But for households using less energy, these charges can form a disproportionately large portion of their bills, which has long frustrated consumer campaigners.
The regulator initially considered tariffs with zero standing charges, but these were scrapped.
Ofgem argued that removing the fees entirely would unfairly hit households with higher energy needs, such as families with young children or individuals who rely on medical equipment at home.
Tim Jarvis, Ofgem’s director general of markets, said: “We’ve listened to thousands of consumers who wanted to see changes to the standing charge and taken action.
“We believe the right way forward is to require all major suppliers to offer at least one tariff with a lower standing charge. This will deliver the choice customers want, without disadvantaging those with high energy needs.”
The announcement comes ahead of a predicted 2% rise in energy costs in the next price cap update, taking the average household bill from £1,720 to £1,755 per year from October 1.
What could it mean for your household bills?
Ofgem’s new plans aim to give people more flexibility in how they pay these fixed costs. Under the proposals, energy suppliers would offer tariffs that shift some standing charge costs into the unit rate - the amount paid per kWh of electricity or gas used.
This means that while the daily fixed fee could be lower, the cost per unit may rise, so overall bills are unlikely to fall for most households.
Jarvis said that these changes are about choice rather than savings, explaining: “We cannot remove these charges, we can only move costs around.”
“It’s important that households carefully consider what’s right for them, as these tariffs are unlikely to reduce bills on their own.”
To prevent abuse of the new tariffs, the regulator is also considering minimum usage rules to stop second homes or long-vacant properties from benefiting disproportionately.
A final consultation on the plans has now been launched, with a decision expected by the end of the year. If approved, these new lower standing charge tariffs could be available to all energy customers across Britain from January.
Consumer groups have welcomed the move but cautioned that it’s only a small step. Simon Francis of the End Fuel Poverty Coalition said households need to “properly understand the deals they are signing up for”, and warned that long-term reform will still be necessary to make the energy system fairer.
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