Does where you live affect your standing charge?
Households are expected to see the standing charges on their gas and electricity bills increase sharply as part of the April energy price cap review, with some households having to pay more than others.
Customers will face varying increases in costs depending on where they live, with some parts of England seeing their daily payments almost double.
Although standing charges are not the biggest worry as it only makes up a small portion of the energy bill, the £71 a year increase still means a less money for the average household. This is particularly worrying for those already in fuel poverty, with an independent think-tank forecasting that the fuel poverty number in the UK will treble as a result of the April energy price cap.
What is a standing charge?
A standing charge is the fee households pay to their energy supplier simply to get access to energy. This means no matter how much energy you use, or even if you don’t use it at all, you will still have to pay this charge.
This payment covers the cost of getting gas and electricity from the energy supplier to your house, including payments to cover things like network maintenance, government schemes, and administration fees. The standing charge is also being used to cover the costs incurred by the recent spate of energy suppliers that have gone bust or ceased trading.
The unit rate is the amount you pay for each unit of energy you use, measured in kilowatt hours (kWH). The less energy you use, the lower this part of your bill will be. And if you don’t use any energy, you won’t be charged this fee.
But the standing charge must be paid regardless of whether you use energy. This is why some people look into no standing charge energy tariffs. When you compare energy, you should consider both the unit rates and the standing charges on offer.
How much are standing charges in the UK?
How much a household pays for their standard charge differs depending on where they live. This also means that the increase in how much households will pay because of the price cap will be different for where they live as well.
Below is the price per day for Single Rate Electricity Meter from April 2022 by British region in order of percentage charge.
|Region||Old standing charge (per day)||New standing charge (per day)||Increase (%)|
|North Wales & Merseyside||22p||45p||102%|
Why are standing charges increasing?
Before we get into why the standing charges are increasing, it might be worth explaining what the energy price cap is. Essentially, it is a cap that limits the rates energy suppliers can charge on a standard variable rate and prepayment energy tariffs. This cap is reviewed every six months by Ofgem, the energy regulator.
As a part of the April energy price cap, the average household will see their energy bill increase by 54%, from £1,227 to £1,971. The standard charge you pay is a part of the price-capped amount.
We are unlikely to see the standing charges drop any time soon due wholesale prices and inflation forecasted to stay on the high end.
Is there anything you can do to lower the cost of standing charges?
No. Standing charges are a fixed cost – you’ll pay the same no matter how much energy you use. Only thing you can do is to shop around for a better deal and find a deal with a lower standing charge. Always check the unit rate too as this is often higher if the standing charge is low.
But there is a way to not pay any standing charges, that is, if you go for a no standing charge tariff.
Also known as a zero standing charge tariff, this is simply where you pay nothing to have your energy supplied to your household. Though this will save you money on the standing charge, these tariffs usually charge more per unit price for gas and electricity.
That’s why it’s well worth shopping around whether you choose to go for a no standing charge tariff or a normal fixed rate deal.
Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.