From 1 October 2026 the energy price cap charges 54.83p a day for electricity and 29.68p for gas before you use a single kilowatt hour: £308.46 a year, just under 18 per cent of the £1,723 typical bill. A zero standing charge tariff does not delete that money, it moves it into the unit rate. Rebuild the cap’s electricity rates to raise the same money without one, and the crossover lands at 2,500 kWh a year: below it you win, above it you lose, by about £8 per 100 kWh. That rebuild is ours, not a tariff on sale.
Ofgem never introduced the zero standing charge price cap variant it consulted on in February 2025, and it decided not to force suppliers to offer a lower standing charge tariff either. What exists instead is a voluntary one-year pilot, on sale since summer 2026, that lowers the standing charge rather than removing it. Below: the October 2026 figures, the crossover arithmetic, and who the trade-off suits.
What a standing charge actually pays for
Ofgem’s definition is short, and it is the whole problem: “the standing charge, which you pay every day even if you do not use any energy on that day”. A fixed daily fee, charged separately on each fuel and capped separately from the unit rate.
It is not supplier profit. In its update on the standing charges review, Ofgem describes the charge as covering “the fixed costs of the wires and the cables that bring energy to our homes”, “the cost of policies like the Warm Homes Discount” and “the customer services of energy companies” — a daily charge, as its policy page puts it, “to cover the cost of running the energy system”.
Those costs do not disappear when the standing charge does. A zero standing charge tariff is a re-plumbing job, not a discount.
One component is explicitly redistributive: the cap’s levelisation allowance, which Ofgem describes as “making sure prepayment and Direct Debit customers pay the same standing charge”. It is about 0.5 per cent of the cap, and why prepayment is no longer the dearest way to pay.
Why it rose — and where it is going now
Ofgem has not attributed the rises of the last few years to specific cost drivers, and we will not invent a breakdown. What the figures do show is that this quarter’s rise did not come from the standing charge. In cash terms the electricity standing charge fell, 57.19p to 54.83p a day — but the July figure included 5 per cent VAT and the October one does not, and 57.19p stripped of VAT is 54.47p, so the underlying charge edged up. Gas standing charges rose outright, 29.04p to 29.68p. What moved the bill was the gas unit rate, 7.33p to 7.97p, worth about £61 a year at the cap’s typical 9,500 kWh.
The policy costs that were cut came off the unit rate, not the standing charge: the government’s guidance on the 2026 domestic energy tariff reductions moved 75 per cent of domestic Renewables Obligation costs to the Exchequer, closed the Energy Company Obligation from 1 April 2026, and made suppliers pass it on by “reducing (on a p/kWh basis) the tariffs that would otherwise be charged”. The VAT cut works differently: the government cut VAT on domestic electricity from 5 per cent to zero from 1 October 2026 to 31 March 2027, and that comes off the whole electricity bill, standing charge included — roughly £45 a year, on both the government’s and Ofgem’s estimate.
The effect is mechanical: cut the unit rate, leave the standing charge alone, and it becomes a larger share of a smaller bill.
The October 2026 numbers
Ofgem announced on 26 August 2026 that the price cap will rise by 4 per cent from October 2026, to £1,723 a year for a typical direct debit dual-fuel household — £60 more than the £1,663 cap for July to September. It blames “higher wholesale gas prices as a result of the ongoing conflict in the Middle East”, and notes that 11 million households, 35 per cent, are on fixed tariffs and unaffected.
The published unit rates and standing charges for 1 October to 31 December 2026, direct debit, Great Britain average, are:
- Electricity: 26.32p per kWh, standing charge 54.83p a day. No VAT applies for this cap period.
- Gas: 7.97p per kWh, standing charge 29.68p a day, including 5 per cent VAT.
Over a 365-day year that is £200.13 of electricity standing charge and £108.33 of gas: £308.46 before any energy is used. The rest is consumption, at the cap’s typical values of 2,500 kWh of electricity and 9,500 kWh of gas; the tables set 3,400 kWh for multi-register Economy 7 meters. Those four rates and two consumption figures reconcile to £1,723.61 — Ofgem’s headline £1,723, give or take rounding. Our fuller breakdown of the October 2026 price cap covers the wholesale story.
Ofgem’s summary of changes breaks the cap down as wholesale 47 per cent, networks 24 per cent, operating, debt and industry costs 17 per cent, policy 6 per cent, EBIT 2.7 per cent, headroom 1 per cent and levelisation 0.5 per cent; the balance is VAT on gas.
Regional variation is bigger than most people think
The 54.83p is a Great Britain average. Ofgem sets fourteen regional caps, and the electricity standing charge differs most, carrying the local distribution network’s fixed costs. Below, the annual charge at nil consumption from Ofgem’s October to December 2026 tables, single-rate, direct debit; check yours with Ofgem’s postcode lookup.
| Region | Electricity standing charge, a year | Equivalent per day |
|---|---|---|
| Merseyside and Northern Wales | £246.95 | 67.66p |
| Yorkshire | £225.09 | 61.67p |
| North Eastern England | £224.78 | 61.58p |
| Southern Scotland | £224.14 | 61.41p |
| West Midlands | £208.89 | 57.23p |
| South Western England | £202.87 | 55.58p |
| Southern Wales | £202.24 | 55.41p |
| Northern Scotland | £201.25 | 55.14p |
| South Eastern England | £190.96 | 52.32p |
| Eastern England | £189.20 | 51.84p |
| East Midlands | £187.80 | 51.45p |
| Southern England | £174.51 | 47.81p |
| North Western England | £166.72 | 45.68p |
| London | £156.64 | 42.92p |
Cheapest to dearest is a £90.31 gap on electricity alone. Gas is far flatter: £101.36 in Southern England to £104.98 in London, excluding VAT.
Payment method matters too. Standard credit still costs more — £184.36 in London against £156.64 on direct debit, £280.04 against £246.95 in Merseyside and Northern Wales. Prepayment standing charges are identical to direct debit in all fourteen regions on those tables, which is levelisation doing its job.
The arithmetic: who actually wins
To compare like with like, build a zero standing charge version of the cap’s electricity rates that raises exactly the same money from a typical household. The £200.13 of standing charge over 2,500 kWh is 8.01p per kWh, so the unit rate becomes 26.32p plus 8.01p, or 34.33p per kWh.
| Annual electricity use | Price cap: 54.83p/day + 26.32p/kWh | Zero standing charge: 34.33p/kWh | Difference |
|---|---|---|---|
| 1,000 kWh | £463.33 | £343.30 | £120.03 better off |
| 1,500 kWh | £594.93 | £514.95 | £79.98 better off |
| 2,000 kWh | £726.53 | £686.60 | £39.93 better off |
| 2,500 kWh (cap’s typical) | £858.13 | £858.25 | Break-even |
| 3,000 kWh | £989.73 | £1,029.90 | £40.17 worse off |
| 4,000 kWh | £1,252.93 | £1,373.20 | £120.27 worse off |
| 5,000 kWh | £1,516.13 | £1,716.50 | £200.37 worse off |
The pattern is symmetrical. Every 500 kWh below 2,500 is worth about £40 to you; every 500 kWh above it costs about £40. That is 500 kWh at the 8.01p uplift, £40.03 either way.
Gas works the same way with a smaller uplift, spread over far more units. The £108.33 over 9,500 kWh is 1.14p, taking the unit rate from 7.97p to 9.11p and the crossover to 9,500 kWh. Burn 5,000 kWh and you save £51.33 a year; burn 15,000 kWh and you pay £62.67 more.
Where the median household actually sits
The Department for Energy Security and Net Zero’s subnational consumption statistics for 2024 put mean domestic electricity use in Great Britain at 3,323 kWh per meter and the median at 2,471 kWh; for gas, 11,359 kWh and 9,859 kWh.
So the median electricity meter sits just below the 2,500 kWh crossover and the mean well above it. They are not the same kind of figure, though: DESNZ counts meters, not households, and Ofgem’s 2,500 kWh is a benchmark value, not a measured average. The supportable claim is narrower than the usual one: on 2024 consumption slightly more than half of GB domestic electricity meters used under 2,500 kWh, and those would have come out ahead on our rebuild, most by small amounts. The ones that lose, lose more, because consumption has a long right-hand tail and the standing charge does not.
One large caveat. A real supplier will not price to break even at the cap’s typical consumption; it prices for the customers it expects to attract, and low users are exactly those. No cap constrains the unit rate on a commercial tariff, so the crossover on a live product is wherever the supplier puts it. Work it out from that supplier’s published rates, not our 34.33p.
What actually happened to Ofgem’s zero standing charge plan
The status matters: it is widely misreported as a done deal, and it is not. On 20 February 2025 Ofgem opened a consultation, closing that March, on introducing a zero standing charge energy price cap variant: every supplier would have had to offer a capped tariff with the fixed costs moved into the unit rate, in time for winter 2025/26. Ofgem said plainly that “this means that tariffs without a standing charge will have a higher unit rate”, and warned that “vulnerable, high-energy users — including those who rely on medical equipment at home or low-income families in poorly insulated houses — would suffer disproportionately if these costs were added to the unit rate for everyone”.
The variant was not introduced. Ofgem consulted instead, from 24 September to 23 October 2025, on requiring suppliers to offer at least one lower standing charge tariff — lower, not zero — while repeating that “this change is unlikely to reduce bills, as tariffs with a lower standing charge will have a higher unit rate”.
That requirement was not imposed either. Ofgem’s next-steps page records that the proposals were “opposed by many charities and consumer groups, the majority of suppliers and just over half of individual consumers who responded”. In place of a mandate it set up a one-year pilot from June 2026 with EDF, E.ON, Octopus and British Gas, in which a dual-fuel household “could expect to pay about £150 less per year on standing charges compared to staying on the price cap” — but with higher unit rates. That £150 is split across both fuels, and single-fuel customers may not get all of it.
These tariffs are real and on sale, but small and gated. Octopus, describing its own version, puts the trial at 33,000 eligible homes, excludes prepayment meters and sets a minimum annual usage, so the very lowest users are shut out. Two gaps remain. We found no Ofgem publication saying how the pilot has gone, how many joined or what the tariffs price at, so treat the £150 as design, not result. And Ofgem’s split standing charge tariff trial, run from 4 November 2025 to 1 March 2026 on a charge partly linked to peak-time use, promised findings in early summer 2026 that we could not find.
So as of September 2026 there is no zero standing charge variant of the price cap, and the pilot lowers the charge rather than removing it. Any deal you are offered is a commercial tariff, priced by the supplier.
Prepayment meters
Two things are true at once. Prepayment is no longer penalised: levelisation has pulled its electricity standing charge down to the direct debit level in all fourteen regions of the October to December 2026 tables — £156.64 a year in London, £246.95 in Merseyside and Northern Wales.
The bad news is structural. Ofgem’s prepayment meters consumer guidance states flatly: “If you have a prepayment meter you will still pay standing charges.” Because the charge is daily, it runs on every day you use nothing: a household that stops heating still accrues £308.46 a year at cap rates, showing up as credit swallowed the moment you top up. That is the strongest argument for zero standing charge tariffs in fuel poverty — though the same households are the ones Ofgem worried about where heating need is high. If you are there, tariff structure is second-order: the Priority Services Register and the Warm Home Discount come first. A smart meter lets you watch the daily charge land.
Electric heating, medical equipment and empty homes
If you heat with electricity, the answer is almost always no
Ofgem’s typical value for a multi-register meter — Economy 7 and similar — is 3,400 kWh, already 900 kWh past the crossover, before storage heating or a heat pump. A household on 6,000 kWh would pay £280 more a year on our rebuild. Off-gas-grid households and all-electric flats are the clearest losers from moving fixed costs into unit rates.
Medical equipment and disability
This was Ofgem’s stated reason for hesitating, and a good one. If someone in the house runs a ventilator, oxygen concentrator, hoist or dialysis equipment, consumption is high and not discretionary, so a zero standing charge tariff moves money away from you. Join your supplier’s Priority Services Register, free and open to anyone with “conditions that mean you need to use medical equipment that requires a power supply”; it brings priority support in an emergency and notice of planned power cuts.
Second homes, holiday lets and empty properties
The one case with no trade-off. A dual-fuel property standing empty on a capped tariff costs £308.46 a year and nothing else; in Merseyside and Northern Wales the electricity element alone is £246.95. On a genuine zero standing charge tariff an unused property costs nothing — real money for a flat between tenancies or a house being renovated.
You cannot answer this without your own kWh figure.
Find last year’s electricity and gas totals on an annual statement or your smart meter, then compare them with the 2,500 and 9,500 kWh crossovers above.
Try the budget planner →What to check before you switch
- Get your own annual kWh, not your annual pounds. An annual statement or a smart meter’s twelve-month total gives it; a monthly direct debit does not.
- Compare fuel by fuel. On our rebuild the crossovers differ — 2,500 kWh for electricity, 9,500 kWh for gas — and many tariffs zero the standing charge on only one fuel.
- Use your region’s rate, not the average. A tariff that beats the 54.83p average may lose against London’s 42.92p.
- Read the unit rate against the cap’s. If the uplift is far more than 8p a kWh on electricity, the tariff is priced for someone who uses less than you.
- Check exit fees, whether it is fixed or variable, and what happens at the end of the term. A commercial tariff is not bound by the cap, and rolling onto a default tariff puts the standing charge straight back.
If your usage is well above the crossover, leave tariff structure alone and spend the effort on consumption, where our guide to cutting energy bills in 2026 is worth more than any switch.
Three things people mistake for the standing charge
The debt allowance. Ofgem’s cap includes an allowance for “day-to-day supplier activity, for example for customer service, marketing, metering and debt”; operating, debt and industry costs together are 17 per cent of the cap. It is not a separate bill line, not all in the standing charge, and abolishing standing charges would not abolish it.
Network costs. At 24 per cent of the cap, the largest non-wholesale block and why regional standing charges vary by £90 a year. Fixed costs of wires and pipes, set by the network price controls, not your supplier; moving them into the unit rate does not reduce them by a penny.
Policy costs. Six per cent of the cap and falling — and the 2026 reductions came off unit rates, not standing charges. If your objection is really to social and environmental levies, that cut has already gone elsewhere.
Frequently asked questions
What is the standing charge under the October 2026 price cap?
For 1 October to 31 December 2026 the Great Britain average on direct debit is 54.83p a day for electricity and 29.68p for gas. Over 365 days that is £200.13 and £108.33, or £308.46 combined, out of a typical dual-fuel cap of £1,723. Your own figure depends on region and payment method.
Do zero standing charge tariffs make my bill cheaper?
Only if you use less energy than the tariff was priced for. The fixed costs move into the unit rate, so you pay them per kWh instead of per day. Ofgem says tariffs without a standing charge will have a higher unit rate, and that a lower standing charge is unlikely to reduce bills on its own. Low users win, high users lose.
At what usage does a zero standing charge tariff stop being worth it?
On our revenue-neutral rebuild of the October 2026 cap, electricity breaks even at 2,500 kWh a year and gas at 9,500 kWh. Every 500 kWh of electricity below the crossover is worth about £40 a year, and every 500 kWh above costs about £40. A real supplier sets its own crossover, so check its published rates.
Has Ofgem introduced a zero standing charge price cap?
No. Ofgem consulted on a zero standing charge cap variant in February 2025 and did not introduce it, then consulted in September 2025 on requiring a lower standing charge tariff and did not impose that either. Instead it launched a one-year pilot from June 2026 with EDF, E.ON, Octopus and British Gas, which lowers the standing charge rather than removing it.
Do I still pay a standing charge on a prepayment meter or an empty house?
Yes to both. Ofgem states that prepayment customers still pay standing charges, and the charge applies every day even if you use no energy. An empty dual-fuel property on capped rates costs £308.46 a year for nothing. Prepayment standing charges match direct debit in all fourteen regions of Ofgem’s October to December 2026 tables, thanks to levelisation.
Why is my standing charge higher than my neighbour’s in another region?
Standing charges carry local network costs, which differ by distribution area. On Ofgem’s October to December 2026 tables the annual electricity standing charge runs from £156.64 in London to £246.95 in Merseyside and Northern Wales, a £90.31 gap. Gas varies far less; standard credit adds more again.
Last reviewed: September 2026. All price cap figures are Ofgem’s published levels for 1 October to 31 December 2026 and apply in Great Britain only. Northern Ireland has no equivalent cap; prices there are overseen by the Utility Regulator, and the Warm Home Discount does not run there. The daily equivalents, the 34.33p and 9.11p zero standing charge rates and every worked example are our own calculations on Ofgem’s published rates, using a 365-day year; no tariff is on sale at those rates. This is general information, not personal financial advice; check your position with Ofgem or your supplier, or get free help from MoneyHelper or Citizens Advice.
