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Ofgem has announced it is piloting low or no standing charge tariffs from April, with four energy suppliers set to offer them initially.
Eligible customers of British Gas, EDF, Eon and Octopus will be able to take part in the trial, which is set to last for 12 months.
The energy regulator expects around 150,000 households will be able to sign up.
Daily standing charges will be 57.21p for electricity (£209 a year) and 29.09p for gas (£106 a year) under the energy price cap from April.
‘Collectively, that’s a sizeable £315 a year in standing charges for a dual‑fuel household,’ says Gareth Kloet, energy expert at Go.Compare.
‘Early modelling suggests that low‑usage homes could save around £150 a year under the new tariff structures.’
Eligibility for the tariffs varies, with Eon confirming customers need to have a smart meter
But suppliers are expected to charge more for the unit cost of energy on these tariffs than regular ones, so how much you could save depends entirely on your overall energy usage – and the rates that suppliers end up setting.
‘Households shouldn’t wait in the hope that these tariffs will significantly cut their bills, especially during winter when the cost of heating means that bills are at their highest,’ said Ben Gallizzi, energy expert at Uswitch.
More choice for households – but further detail needed
Low or no standing charge tariffs are designed to give customers more choice, especially those who use don’t use much energy, said Ofgem.
Eligibility varies between suppliers, with Eon Next requiring customers to have a smart meter and pay by direct debit.
But with no detail available on the exact rates that suppliers will charge, it’s difficult to work whether you’ll be better off under these tariffs.
Eon Next trialled this type of tariff in 2024 and found that 64 per cent of customers who took part had higher energy usage – and could have saved money on another fixed product with a higher standing charge.
‘Having your annual consumption to hand and comparing the whole market is the best way to see whether a low‑standing‑charge tariff, a standard tariff or a fixed deal offers the best value for you.
‘If you’re already in a fixed contract, remember to factor in any exit fees, as these could wipe out potential savings,’ said Gareth Kloet of Go.Compare.
Ben Gallizzi of Uswitch told us the new tariffs are unlikely to be the best choice in most circumstances, and ‘taking action now’ to cut energy bills by fixing is a must.
‘If more low standing charge tariffs do become available, it will still be really important that consumers compare them with the fixed deals available to them, as lower usage households are likely to save more by choosing the most competitive tariffs available,’ he said.
It’s quick to compare energy tariffs using a price comparison website, which should show the best deals for you based on your address.
Smaller energy suppliers such as Outfox Energy and Fuse Energy have consistently offered the cheapest energy deals over the last year.
A top deal from Fuse Energy earlier this week offered savings of £260 annually for the average household against the current cap and £143 against the April cap.
Keep in mind that neither the price cap nor fixed tariffs limit your total bill, instead they set the unit cost of energy. If you use more than the average household, you’ll pay more than the average annual prices quoted.