What is a standing charge? Standing charges explained

What is a standing charge?

Have you noticed that your energy tariff includes a standing charge, but you’re unsure what it means? In this article we’ll answer some of the most commonly asked questions about standing charges on your gas & electricity bills.

Standing charge definition

First things first, what is a standing charge?

Quite simply, a standing charge is the fixed cost you pay for having access to a gas and/or electricity supply.

It works a little bit like the line rental on your phone bill – you always pay it no matter what, and then you pay for individual calls on top.

The standing charge pays for things like network maintenance, meter readings, and in some cases government energy saving initiatives.

What is a typical standing charge?

It varies depending on who supplies your energy and which tariff you are on. As a very rough guide, it can range from 10p-80p per day for gas, and 5p-60p per day for electricity.

Eversmart Energy offers one of the lowest standing charges in the industry – 10.5 pence per day on most of our tariffs. You can enter your details and get a quote here.

What’s the difference between standing charge and unit rate?

Whilst the standing charge is a flat fee that stays the same from month to month, the unit rate is the cost you pay per unit of gas or electricity consumed. Going back to our phone comparison – if the standing charge is like your line rental, the unit rate is a bit like paying for individual calls.

Your unit rate is measured in pence per kilowatt-hour (p/kWh) for both gas and electricity. Again, the price per unit depends on your supplier and tariff. Together, the standing charge and the unit rate make up your energy bill.

Is there such thing as a zero standing charge tariff?

Yes. They’re not very common, but some suppliers do offer tariffs with no standing charge – including Eversmart Energy.

However… just because you don’t pay a standing charge, it doesn’t necessarily mean your bills will be cheaper.

Most people are actually better off paying a standing charge. The only people that will really benefit from a ‘no standing charge’ tariff are those who own properties that are empty for long periods of time – for example if you are away from home for several months of the year, or if you own a garage or workshop that is completely separate from your main property.

Workshop
A ‘no standing charge’ tariff may be suitable for buildings such as workshops, that are empty for long periods of time.

If your tariff has a higher standing charge, your unit rate will probably be cheaper and vice versa. If you pay no standing charge at all, your unit rate could be considerably more expensive. The best thing to do is find a tariff that strikes the right balance for your usage and circumstances.

If you think you would be better off on a no standing charge tariff, you can contact us to discuss your options.

Do standing charges apply on a prepayment meter?

Yes. The standing charge is subtracted from your credit every day. If you’re going away on holiday, it’s important that you leave enough credit on your meter to cover the standing charge.

Also be aware that if you run out of credit the standing charge will still be applied, building up a debt if you don’t pay it back.

Do standing charges apply on a smart meter?

The standing charge is determined by your tariff, not the type of meter you have – so it doesn’t make any difference if you have a standard meter or a smart meter. We have answered some common questions about smart meters in this article.

 

Do you feel you are paying too much for your gas and electricity? Eversmart offer some of the most competitive energy prices in the industry – you can get a quote in under 2 minutes here.