Lower standing charge tariffs: next steps

Details

In September 2025, we consulted on introducing a new requirement where energy suppliers must offer at least one lower standing charge tariff. These proposals aim to give consumers more choice and control over how they pay their energy bills. The consultation closed on 23 October 2025. You can read the summary of responses and non-confidential responses to our consultation.

We have carefully considered and reviewed all the feedback. The policy proposals were opposed by many charities and consumer groups, the majority of suppliers and just over half of individual consumers who responded to our consultation. Some charities and consumer groups raised concerns that tariffs were likely to be more expensive for consumers with higher consumption.

We remain committed to making sure there are choices available for consumers. But we also understand concerns about potential consequences for both consumers and suppliers when making suppliers offer specific tariffs and the risks of more regulation of pricing in retail.

Next steps

As part of our review of the feedback received, we are launching a one-year, lower standing charge tariff pilot starting from April 2026.

Energy suppliers taking part in the pilot will offer a lower standing charge tariff to eligible customers. This will help us understand supplier and customer experiences. These tariffs will first be offered to eligible customers of EDF, E.ON, Octopus and British Gas, and we are encouraging more suppliers to participate.

The pilot will allow us to test our policy proposals in a real-world context. There will be a limit on the number of customers that can sign up to the available tariffs. This will mean that we can assess the number of customers that sign up to the tariff and gather feedback from customers across Great Britain (England, Scotland and Wales).

We will collect data from energy suppliers to understand their tariff pricing, and customer response and experience of the tariffs. This will inform our policy and decision making on standing charges going forward.

The pilot tariffs may not mean that the energy bills of those who take part will be cheaper than other tariffs currently available. We would encourage customers to talk to their energy supplier about their energy use and whether they would be suitable to take part in the pilot.

Pilot tariffs

As part of the pilot, customers who choose to take up the tariffs and use both electricity and gas could expect to pay about £150 less per year on standing charges compared to staying on the price cap. This discount will be split across both fuels and therefore single fuel customers may not receive the full reduction.

We expect suppliers to set unit rates higher for these tariffs. This means that customers on the pilot tariff could pay more for the energy they use depending on their energy use.

Each supplier will have their own terms and conditions and eligibility criteria for the pilot tariffs.

Background

We began a review of standing charges in 2023. Since then, we’ve heard from energy suppliers, consumer groups, household bill payers, industry bodies, and network companies.

Across these groups, strong interest was shown in seeing changes to standing charges. Tens of thousands of consumers responded to express their dissatisfaction with the current system. While we cannot reduce these fixed costs, we want to focus on introducing more opportunities for consumers to have increased control and choice when it comes to how they pay their standing charges.

So far, we have encouraged suppliers to introduce lower standing charge tariffs voluntarily. There are some low or no standing charge tariffs already being offered by some specialist suppliers to customers on a prepayment meter. However, the pace of change had not been sufficient to meet our policy aims or consumer expectations.

In February 2025, we consulted on a variant of the energy price cap that would not have a standing charge. As part of this proposed variant, the fixed charges currently recovered as part of a daily standing charge would be added to the unit rate instead. Following feedback, we are looking at a wider range of options for how we introduce more choice and control for consumers in how they pay for their energy.

Cost allocation and recovery review

Much of the feedback raised by stakeholders was broader than this policy and point to the need for a complete picture of cost allocation and recovery. We launched the Cost allocation and recovery review where we are looking at how to take a more holistic and fair approach to structuring energy bills. This includes looking at how costs are split between standing charges and unit rates, how different tariff structures could work, and how costs are shared across different types of consumers.

This work is closely linked to the split standing charge trials. In these trials we are testing whether consumers can be encouraged to lower their peak electricity usage in return for a rebate on their standing charge. We are working with British Gas and Scottish Power on these trials. The trials will finish in March 2026.

Evidence from these trials and the lower standing charge tariff pilot will be used to inform the next steps on the cost allocation and recovery review. View our update on our energy system cost allocation and recovery review call for input.