The unit rate is the price-per-unit of the gas and electricity you consume in your household. For example, electricity is measured in kilowatt per hour kWh , so a unit rate would be the cost per each kWh used! If your energy tariff does not have a standing charge, your price-per-unit is going to be higher to compensate. The rule of thumb when deciding between a tariff with or without a standing charge is this: if your place of residence is empty for nine months or more, an energy tariff with no standing charge could most likely be your best bet.
Tariffs with standing charges are the most popular for a reason, and while customers are charged even if their premises are empty, the unit price is so much lower that there can be no complaints. The reason you pay a standing charge is to cover the costs of actually having a running supply of gas and electricity to your home - your unit rates are on top of the standing charge. Essentially, you paying your standing charge is you paying for the privilege of having an energy supply, and is usually paid in a flat rate.
Ofgem removed standing charges as a compulsory added fee back in following a recommendation by the Competition and Markets Authority. However, most suppliers still add the standing charge onto the end of their energy tariffs.
There are some tariffs out there that do not have a standing charge, but the likelihood is your price-per-unit of energy is going to reflect this, and will be higher than other tariffs that still maintain the standing charge. Jessica Bown is an award-winning freelance journalist covering financial, business, and consumer issues. Starting her career at the Daily Express, she has worked for The Sunday Times and a variety of online and print publications.
Select Region. United States. United Kingdom. Advisor Energy. Advertiser Disclosure. Updated: Aug 20, , pm. Jessica Bown Contributor. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations. What are gas and electricity standing charges? Find out more.
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Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. This can be useful if you have several properties on the one gas or electricity meter. This could result in you paying more overall each month when compared to a tariff that includes a standing charge, particularly if your energy use is medium-to-high over the course of a year.
Only a handful of suppliers, including offer no standing charge energy tariffs. Standing charges also apply to prepayment energy tariffs — where you pay for your energy in advance by topping up your meter with credit. Standing charges for those with a prepayment meter are usually around 28p per day but again, this varies depending on the supplier and your location.
Prepayment tariffs are not as competitive as those where you pay in arrears, so if you have a prepayment tariff, you may want to ask your supplier to see whether you can switch to a credit meter instead.
Your chances of being able to switch will be higher if you have a good credit rating and are not in debt with your supplier. If you are able to make the switch, a new meter will be installed in the property and you will then be able to switch tariffs — potentially to one without a standing charge. Yes, standing charges are applied to smart meters. It all depends on your circumstances and usage. A lower standing charge tends to be coupled with a higher unit rate.
Generally speaking, this scenario tends to benefit a consumer with low usage. By contrast, a high usage consumer would be favoured by the reverse. The price cap imposed by the regulator, Ofgem, is essentially backstop protection against excessive energy price rises.
It applies for users on default energy tariffs, whether these are paid by direct debit, standard credit, or via a pre-payment meter. The price cap limits the rates a supplier can charge for their default tariffs, including, the standing charge.
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