Ofgem has taken a significant step towards reforming how households pay for energy. On 24 September 2025, it confirmed plans that will force energy suppliers to provide at least one tariff with a low or zero standing charge. This change is intended to give consumers more choice over fixed costs that form part of their energy bill.
The official consultation period will run until 22 October 2025, and Ofgem expects the new rules to be in force by early 2026. Suppliers will have to adhere to guidelines that set out how much they can raise unit charges to compensate for lower standing charges, and detail what savings customers might expect.
What Exactly Is Changing?
Ofgem is moving to require all energy suppliers to offer at least one low-or-no standing charge tariff by early 2026. The purpose of this mandate is to allow greater flexibility in how customers pay for the fixed infrastructure and administration costs that standing charges cover. These costs include metering, network upkeep, and other non-usage components of providing energy.
Standing charges have ballooned over recent years, and for many households paying by Direct Debit, the average standing charge is now 54p per day for electricity and 34p per day for gas—amounting to roughly £320 a year just in these fixed charges. Because standing charges apply regardless of how much energy you actually consume, very low users are often hit the hardest.
Ofgem has made clear that although these low standing charge tariffs will reduce fixed daily fees, unit rates will be higher to balance out the cost to suppliers. The cost of maintaining and running the energy grid, plus administrative overheads, cannot just vanish; they must be paid for somehow. In short, your electricity per-kWh cost may go up if you choose a tariff with a lower standing charge.
How Will This Affect Consumers?
For many people, the headline might be: “Will my bill go down?” The answer is nuanced. Some households—especially low-usage ones—could see savings. Others may find that the higher usage charges more than offset the réduction in standing charge. It depends largely on how much energy you use.
Ofgem expects that customers may save around £170 per year on their standing charges alone. But the trade-off is that you’ll be paying more for each unit of energy you consume. So unless you reduce usage or are already using relatively little, total savings could be modest or even negative.
These changes are aimed more at giving consumers choice rather than guaranteed savings. The regulator recognises that some households will prefer to pay more per-kWh in return for a low or no daily standing cost, while others might stick with the standard arrangements.
Who Will Benefit Most from These Reforms?
Those who are likely to benefit most are low-usage households. If your energy consumption is small (perhaps because you are away part of the year, or you use minimal electrical appliances), the standing charge currently forms a large slice of your total bill. For you, seeing it reduced or removed could make a noticeable difference.
People with properties that are largely empty for periods of time—holiday homes, second homes, maybe even rental properties between tenants—are also likely to gain. Over summer months or during prolonged absence, a low standing charge tariff can significantly reduce the fees you’re paying just to keep the premises connected.
By contrast, if you are a medium-usage household, your chances of seeing net savings are mixed. Some may do better if they can reduce energy use; others may find that the higher per-unit rates erase the savings from the standing charge cut. For high-usage households, it’s less likely that moving to a low communal fixed charge tariff will help: the increase in unit rates may more than offset the benefits of lower standing charges, resulting in a higher overall cost.
What Experts Are Saying
Martin Lewis, founder of MoneySavingExpert.com, has long pushed for standing charges to be cut, arguing they unfairly penalise those who use less energy. In response to these latest proposals, he warned:
“If it’s not part of the Price Cap it likely won’t be price regulated, so firms can charge what they like. In other words, they could choose to offer a no/low standing charge tariff but with hideously high unit rates defeating the purpose of getting it for almost everyone.” (MoneySavingExpert.com)
Lewis emphasises that to protect vulnerable and low-usage customers, any low or zero standing charge option must be brought within the Price Cap; otherwise, it risks being priced in a way that hurts the very people it’s meant to help.
From the regulator’s side, Ofgem has stressed that the requirement to offer low standing charge tariffs is necessary to give households more control over fixed costs. In its consultation, the regulator said:
“We want to give households more choice in how they pay the fixed costs currently covered by the standing charge.”
This puts the emphasis on giving consumers agency—letting them choose whether to bear more on the usage side or more via fixed charges.
Why Ofgem Is Doing This (And What It Means)
One of the motivations behind this Ofgem policy is fairness. Many people feel that standing charges are opaque and unfairly affect low-usage households or those on tighter incomes. The regulator believes that by offering tariffs with low or no standing charge, it can help ensure that households are not penalised simply for being efficient or using little energy.
Another motive is transparency. Standing charges are often less visible to consumers than the per-unit energy use—people know how many kWh they use, but less often how much they’re paying just to stay connected. By making low standing charge tariffs mandatory, Ofgem aims to make the structure of energy bills more understandable.
That said, Ofgem has also acknowledged that low standing charge tariffs are likely to be a short-term solution while it continues a broader investigation into how to allocate fixed and variable costs across the energy system. The danger is that some households might see higher total bills if they pick the new tariff without understanding their usage patterns.
Final Thoughts
The coming rule changes around standing charges mark a shift in how Ofgem is trying to balance fairness, choice, and cost in the UK energy market. These changes won’t be perfect for everyone, but they do represent a meaningful attempt to give consumers more say in the fixed vs variable cost components of their bills.
If you are a low-usage household, or if you tend to be away for periods, you could genuinely benefit. If your usage is high and consistent, you’ll need to run the numbers carefully.
For all households, the key is awareness. Know your current usage, understand what your standing charge and unit rates are, and think about what trade-offs you’re willing to make. That way, when these new tariffs launch, you’ll be ready to make an informed decision.
For now, remember that the price cap is rising in October and is predicted to rise significantly next April as well. To beat these increases, you can switch to a fixed rate tariff today.
