About this guide
This guide explains Ofgem's lower standing charge tariff pilot launched in April 2026. Educational information only. Utility Matchmaker is an information and referral service.
What Ofgem announced
In April 2026, Ofgem launched a one-year pilot requiring four large suppliers to offer at least one tariff with a lower standing charge than the standard price cap level. The four suppliers taking part are EDF Energy, E.ON Next, Octopus Energy, and British Gas.
The pilot runs until April 2027. Ofgem designed it for customers who use less energy than the typical household, those for whom the fixed daily standing charge represents a disproportionately large share of their total bill.
What a standing charge is and why it matters
Your electricity bill has two cost components. The unit rate covers the electricity you actually use, charged in pence per kilowatt-hour. The standing charge is a fixed daily amount you pay regardless of usage.
From 1 July 2026 the price cap sets the electricity standing charge at 57.19 pence per day for a typical direct debit customer. Over a full year that adds up to £208.74 before a single unit of electricity is consumed. Add the gas standing charge of 29.04 pence per day and a dual fuel household pays £314.74 per year in standing charges alone.
For a household that uses very little energy, the standing charge can represent 30 per cent or more of the total annual bill. A reduction in the daily rate has a bigger proportional effect on low users than any reduction in the unit rate.
How the pilot works
Under the pilot, the four participating suppliers must each offer at least one tariff where the standing charge sits below the standard price cap level. The reduction does not have to be on a standard variable tariff. Suppliers can meet the requirement through a fixed or flexible product.
The trade-off is a higher unit rate. A supplier reduces what you pay each day but charges more per kilowatt-hour consumed. Whether this saves you money depends on your usage level. Low-use households benefit. High-use households may pay more.
Ofgem will assess the pilot before deciding whether to extend, expand, or make it permanent beyond April 2027.
Who is most likely to benefit
The pilot targets customers who use less than Ofgem's typical consumption values. From 1 July 2026 those values are 2,500 kWh per year for electricity and 9,500 kWh for gas.
A single occupant in a flat using around 1,500 kWh per year pays standing charges that represent a much larger share of their bill than someone in a four-bedroom house using 4,500 kWh. For that lower-use customer, even a 10 pence per day reduction in the standing charge saves £36.50 per year before the unit rate is touched.
The pilot also applies to secondary or holiday properties where usage is intermittent. Standing charges continue even when no energy is consumed, so a property sitting empty for several months a year accumulates standing charge costs with no offsetting usage to dilute them.
Customers who use above-average amounts of energy are less likely to benefit. A higher unit rate on a lower standing charge tariff can exceed the standing charge saving if consumption is high.
How to find a lower standing charge tariff
The four participating suppliers are not required to advertise pilot tariffs prominently. You may need to look for tariffs with a reduced standing charge when comparing rather than relying on headline annual cost figures, which are calculated using typical consumption values that may not reflect your actual usage.
When you compare through the partner platform on this site, tariff details include both the unit rate and standing charge for each option. A tariff showing a lower annual cost on typical consumption may cost you more if your actual usage differs significantly from the typical values used in the calculation.
The standing charge calculator on this site lets you model what different daily rates mean for your bill at your own usage level before you compare.
What Ofgem said about the pilot
Ofgem confirmed the pilot in April 2026 alongside the Q2 price cap announcement. The regulator said customers who use less energy should have more choice, and that the current structure where standing charges are identical regardless of usage level does not serve lower-consumption customers well.
The pilot does not change the price cap itself. The maximum unit rates and standing charges under the cap remain as set. Participating suppliers offer the lower standing charge tariffs alongside their standard products rather than as a replacement.
Ofgem will publish findings before April 2027. A requirement for all suppliers to offer lower standing charge options could follow depending on the results.
Sourced from Ofgem's April 2026 price cap announcement. Licensed under the Open Government Licence v3.0.
Key terms
Definitions used in this guide:
- Standing charge: Fixed daily amount on your bill regardless of usage. Shown in pence per day.
- Unit rate: Price per kilowatt-hour consumed.
- Price cap: Maximum unit rate and standing charge Ofgem allows on standard variable tariffs.
- Ofgem: Office of Gas and Electricity Markets. Independent energy regulator for Great Britain.
- TDCV: Typical Domestic Consumption Values. Standard usage figures used to calculate the headline cap annual bill. From 1 July 2026: 2,500 kWh electricity, 9,500 kWh gas (previously 2,700 / 11,500).
- OGL: Open Government Licence. Governs Ofgem's public data releases.