Who's really in charge of standing charges?

Why are standing charges so high?

Increases to the electricity standing charge over the past few years have been mostly driven by decisions by Ofgem, the regulator, 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, our 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 £10 million worth of standing charge holidays and we also offer direct financial support to anyone struggling with their bill.

High standing charges disproportionately hit homes that don't use much energy, which tend to be low-income households, and we don't think that's fair. Consistent increases to standing charges make it a lot more difficult for people to see a reduction in their energy bills when they've changed their usage habits, which we should all want to encourage in the bid for a greener world.

We also believe that standing charges unfairly impact homes in areas with lower population density, like Scotland, Wales and northern England.

• Carrying out meter readings
• 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). Standing charges have gone up by about 160% since 2019 and we think this is unsustainable and desperately needs to change.

Why do standing charges vary region to region?

Standing charges vary depending on how tricky it is for suppliers to get power to your part of the country – like in rural areas, where the networks are more spread out and there are fewer households to split the cost. Each of the electricity distribution networks (DNOs) combines their costs and splits them between everyone living in the area where they operate, which means each region’s standing charge varies slightly.

How does the standing charge work with prepayment meters?

If you have prepayment meters, your daily standing charge will be taken from your top ups. That means if you don’t top up for a while, you’ll still need to pay the standing charge next time you top up – like if you haven’t topped up your gas over the summer.