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No standing charge energy tariffs

No standing charge energy tariffs

3-no-standing-charge-tariffs

The article below explains what a standing charge is, the advantages and disadvantages of an energy tariff without a standing charge and how to switch. To reduce the cost of your energy bills, you can save an average of £482* by switching and we’ll do all the work for you.

What is a standing charge?

The standing charge is an amount you pay to your energy supplier to cover the cost of keeping your home connected to the energy network and supplying it with gas and electricity. It works in the same way as the line rental paid to telephone and broadband providers.

The amount you pay in standing charges depends upon your energy supplier and the type of tariff you’re on, but it is possible to take out a no standing charge tariff, thanks to an Ofgem ruling that removed the need for standing charges to be applied.

How much is a standing charge?

The table below shows how much you can expect to pay in standing charges:

Energy

Standing charge per day
Gas

Between 10p and 80p

Electricity

Between 5p and 60p

How does a tariff without a standing charge work?

If you're on a no standing charge tariff, you'll only pay for the energy you actually use. This means you won’t pay a penny for those days you’re not using any gas or electricity.

But with no standing charge to pay, you’ll probably find you’re charged more for each unit of energy you do use, though once your usage reaches a set level, the unit charge usually drops for the remainder of the billing period.

What are the advantages to a tariff without a standing charge?

The most obvious advantage tariffs with no standing charge is that you only pay for the energy you use – if you aren’t using gas or electricity for days at a time, you won’t be charged a penny.

Another advantage of a no standing charge tariff is that the price you pay for each unit of gas or electricity you use is usually reduced once your usage reaches a certain threshold, which could be ideal if you own another property that is only used occasionally.

What are the disadvantages to a tariff with no standing charge?

Although it’s easy to assume you’ll pay less for your gas and electricity with the standing charge removed, the higher unit prices mean this won’t be the case if you’re a medium to high energy user, and you may end up paying much more for your energy.

Should I switch to a tariff with no standing charge?

We’d all like to cut the number of charges we have to pay on our energy bills, but before you make the switch to a no standing charge tariff, you need to work out exactly how much this will save you once the higher unit fees are factored in.

Once the calculations are done, although you’ll save on the daily charges, the higher unit rates will most likely see paying more for your energy, especially if you regularly run white goods or crank up the thermostat to keep warm.

So it all really depends upon your circumstances – if you use a lot of energy, it’ll be more cost-effective to opt for a tariff with lower gas and electricity unit rates, but if you’re away from your property for around nine months or more each year, you could save with a no standing charge tariff.

How do I switch to a tariff with no standing charge?

In most cases it doesn't make a huge amount of difference what type of tariff you choose - the vital factor is to ensure that you're getting a good overall price for your energy.

Run a comparison now to see how much you could save.

When switching to an energy tariff with no standing charge, it’s best to enter your annual usage in kWh, but if you only have your monthly usage, just multiply this by the number of months you expect to be at home.

And if you only know how much you pay each month, you’ll have to multiply this by the amount by the number of months you expect to be at home – so if you pay £50 a month on electricity and £50 a month on gas, you’re at home for six months of the year, enter £300 per year for each fuel, or £600 for a dual fuel tariff.

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