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- While the cost of energy has fallen, we spend more covering suppliers' costs
The standing charges on our gas and electricity bills have nearly tripled since the introduction of the energy price cap six years ago.
In fact, This Is Money analysis reveals that the fixed fees energy firms charge households to cover their own operating costs now make up a larger proportion of household bills than ever.
While the amount customers pay for each unit of electricity and gas has stabilised after reaching record highs in 2022, standing charges have continued to rise.
As this element of an energy bill can't be reduced, it is a particular issue for households that try to save money by limiting their usage.
Even with lower standing charge tariffs, which will be introduced next year, bills are likely to stay at similar levels as the cost is transferred to unit prices.
Why have standing charges reached untenable levels, and will network and policy costs keep being added to people's bills?
What makes up standing charges?
Standing charges have soared in just six years, and that is partially due to the way they are calculated.
Energy UK says the vast majority of the standing charge is made up of the operating costs of suppliers, but network and policy costs are also significant contributors.
For electricity, network costs make up 49 per cent of the standing charge - or 26.1p. This refers to the cost of maintaining infrastructure such as the local and national grids.
It is followed by core operating costs and industry charges, which make up 28 per cent and cover things like billing, customer service and IT.
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Policy costs, broadly covering government levies charged on energy firms, make up a tenth of the standing charge, while debt-related costs make up 3 per cent, or 1.6p.
Core operating costs and industry charges make up just over a quarter of electricity standing charges, which includes the cost of smart metering.
For gas, the bulk of the standing charge covers core operating costs and industry charges (67 per cent or 22.7p) followed by policy costs, which make up 18 per cent of the standing charge (6.2p).
How much have standing charges increased by?
Ofgem introduced the energy price cap in January 2019 to protect customers who had finished their fixed rate energy deal and dropped onto a standard variable tariff (SVT) from price gouging by suppliers.
Before that, standing charges were set by suppliers with no upper limit.
> Read more: Energy saving tips: How to save on your energy bill
The energy price cap was initially set every six months, but when the cost of energy started to fluctuate more frequently, suppliers came under strain and could not commit to buying energy at the price at which they had to retail it.
On a traditional tariff, a household – based on October price cap figures – typically spends £1,754 a year on energy, of which £320 is the standing charge.
Using Ofgem's data, our analysis shows that standing charges have increased from roughly 28p for both gas and electricity to nearly 90p since January 2019.
Electricity standing charges have had the biggest increase over the years, rising from 16.01p in January 2019 to 53.35p in October 2025.
The biggest jump came between 2021 and 2022 during the height of the energy crisis. In October 2021, the electricity standing charge was 21p, before it rose to 28.49p in April 2022.
Six months later, it jumped to 53.37p. It has stayed at a similar level since then, other than a small temporary dip to 50p in July.
The most striking increase is how much of our energy bills are made up of standing charges. For example, the estimated overall price cap in January 2019 was 55p per day, and the electricity standing charge made up 29 per cent of the bill.
By October 2025, the estimated price cap is around 115p per day, and electricity standing charges make up 46.4 per cent of a dual-fuel household's average energy bill.
A similar pattern has followed with gas standing charges, albeit at a slightly lower rate.
Gas standing charges were set at 13.75p when the energy price cap was introduced, slowly increasing until a huge jump from 19p in October 2021 to 27.22p in April 2022.
The fixed costs remained at a similar level until another jump in January 2024 to 33.18p.
In January 2019, gas standing charges made up a similar proportion of the bill as electricity at 25 per cent. It has been at a similar level, other than at the peak of the energy crisis, and currently makes up nearly 29 per cent of the daily amount charged to households on SVTs.
The amount you pay in standing charges will depend on where you live.
Households in North Wales and Mersey pay the most at 69.95 pence per day for electricity but Londoners pay the most in gas standing charges at 34.57p per day.
Customers in Northern Scotland pay the second highest standing charges at 61p per day for electricity, followed by the 'Northern' region and Yorkshire at 59.86p and 58.65p per day respectively.
Why have standing charges tripled in six years?
Standing charges stayed relatively level until the energy crisis, but when smaller energy firms went bust, customers switched to other suppliers who had to recoup the added costs.
These 'supplier of last resort' costs were added to network cost allowances.
The jump in standing charges in 2022 and 2023 also coincided with Ofgem's Targeted Charging Review coming into effect.
This aimed to achieve a fairer distribution of electricity network charges among customers, but this reallocated a lot of network costs from the unit rate to standing charges.
This is also why electricity standing charges are more expensive than gas, because electricity is used more widely across households.
Higher inflation also affects how standing charges are calculated. Standing charge rates for electricity distribution are set 15 months in advance, based on the inflation rate at the time, according to Energy UK.
The reason they've been so high in 2024-25 is because they're based on the inflation rate in December of 9.2 per cent. In theory, it means that they should fall in the coming years, but there are also more expensive policy costs coming down the line.
A new levelisation charge was added to standing charges for direct debit customers to help fund lower standing charges for prepayment customers.
Now the Warm Home Discount is weighing on policy costs, with Ofgem saying that it is expected to add £15 to the typical bill on October's prices.
Will standing charges keep rising?
Ofgem launched a review of standing charges in 2024 but decided against moving some of the charges to the unit rate.
It found that many lower-income households are affected because even when they drastically cut their usage, they still pay over £300 a year in standing charges.
The regulator has said suppliers will have to introduce lower standing charge tariffs to help these customers, but the cost is likely to shift to unit rates.
Ofgem has not stated how the tariffs will work, but has indicated that average annual energy bills on the new tariffs will not be lower than the old ones.
If an energy firm were to launch a tariff with a 50 per cent reduction on its standing charge.
On a traditional tariff, a household – based on October price cap figures – typically spends £1,754 a year on energy, of which £320 is the standing charge.
If the standing charge is halved, the total cost of the energy consumed would increase in line from £1,434 to £1,594.
If you use a third less energy on the traditional tariff, you would pay £1,276 each year. However, under a reduced standing charge, you would pay £1,223 – a £53 annual saving.
For customers who stick to price cap-tracked tariffs, it is very unlikely that standing charges will be cut, unless there is a drastic reduction in operating and policy costs.