The Low Standing Charge tariff trial
We know standing charges are unpopular and we completely agree they're too high. We've long argued for them to come down by tackling the underlying costs of running and upgrading the energy grid.
In the meantime, the energy regulator, Ofgem, wants to explore whether some customers would benefit from a different setup: a tariff where the standing charge is lower but the cost for the energy you use is higher.
To help them find out whether this works for people in the real world, we, along with several other big suppliers, are helping them with a small trial.
Here's how the Low Standing Charge Tariff Trial works, who it's for and what you need to think about before you switch.
First things first, what are standing charges?
The electricity standing charge covers all the costs associated with supplying energy, before you use any of it (which you then pay for per unit). That includes things like:
Using and maintaining the energy networks that get electricity across the country to your home
Payments towards government initiatives that help vulnerable households and reduce CO2 emissions
These are fixed costs suppliers like us are charged for every meter (whether the meter uses any energy or not).
This tariff won't save most people money
We need to be really clear: this tariff isn't a magic wand for cheaper energy. Think of it like a seesaw. If we lower the daily standing charge, we have to increase the unit rate (what you pay for the power you use) because we still have to find a way to cover the fixed costs we talked about before.
Because of the higher unit rates, this tariff won't save most people money. For a lot of homes – especially those that use more energy – the pricier unit rates would quickly swallow up the standing charge savings.
As a general rule of thumb, if you use more than 1,800kWh of electricity or 7,500kWh of gas per year then the £150 reduction in standing charges will be eroded by the higher unit rates and you'll end up paying more than you would on our current Fixed tariff.
Who is the trial for?
Ofgem is keeping the trial very small, so we'll be offering it to 33,000 homes. This way we can closely monitor how customers fare. To be eligible, you need to:
Use more than a minimum amount of electricity: Ofgem recognises that a minimum usage requirement is appropriate on any low standing charge tariff. This is to make sure people on it represent a normal household and not those with abnormally low consumption (for example second-home owners). Because of that, if you use less than 666kWh of electricity or 2,836kWh of gas per year, you won't be able to join.
Understood! I still want to join
If you're a new customer, or an existing one looking to switch tariffs, you'll see the trial pop up as an option in the sign-up or switching journey – if you're eligible.
If it doesn't appear for you, it probably means your home's energy usage or meter type doesn't fit the criteria, or the trial has already reached capacity.
Ultimately, this is a limited experiment to gather data for Ofgem. We want to see how it impacts real bills and whether there's a genuine appetite for a tariff like this before we make any permanent decisions.
What we're doing about high standing charges
We think standing charges need to come down by reforming the energy network. Here's a video of our CEO, Greg, explaining why they're so high.
As a bit of background, increases to the electricity standing charge over the past few years have been mostly driven by higher costs of maintaining and building the networks because of decisions by Ofgem to shift costs off the unit price (how much you pay for what you use) and on to the standing charge (a flat fee you pay even if you use nothing). The big one was Ofgem's Targeted Charging Review (TCR), which we strongly opposed, leading to major changes in 2022 and 2023 that sharply pushed the standing charge up.
In response, we lowered standing charges by 4% for all customers on our standard Flexible Octopus tariff in 2022 and offered standing charge holidays for our most vulnerable customers. At the time, ur CEO, Greg Jackson, said: "High standing charges are egregious. This £40m package is the beginning of our battle to bring them down."
True to his word, our campaign has continued. In 2024, we wrote to Ofgem to urge it to "take positive steps" to drive down standing charge costs. Our Octo Assist fund has given £10million worth of standing charge holidays and we also offer direct financial support to anyone struggling with their bills.
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Nicki Slater-Arnold
Writer