Great Britain’s energy regulator, Ofgem (the Office of Gas and Electricity Markets), has recently announced new rules that mean all energy suppliers will be required to offer low standing charge energy tariffs from January 2026.
Keep reading to find out what this could mean for your monthly bills, who’s eligible for these new tariffs, and which energy suppliers you could switch to before the new year to save on your winter heating costs.
What are Ofgem’s New Low Standing Charge Energy Tariffs?
Ofgem’s new rules mean all major energy suppliers will have to:
- Offer their customers at least one lower standing charge (a daily cost added to your bill, even if you don’t use energy, which covers costs like moving gas/electricity and supplier business costs) tariff option, which should be lower than those set by the price cap, across England, Scotland and Wales.
- Offer “reasonably priced” tariffs (Ofgem can request proof of how rates were calculated if they appear excessive).
- Clearly explain what the tariff rates and charges are to their customers, allowing them to make more informed decisions.
From January 2026, the above changes will become a requirement under the Standard licence conditions.
Who is Eligible for the New Low Standing Charge Energy Tariffs?
Only those who reach the minimum level of energy usage set out by Ofgem will be eligible for the new low standing charge tariffs. The thresholds for gas and electricity usage have been proposed as follows:
- Gas: 2,836kWh per year
- Electricity: 666kWh per year
- Total: Approximately £178 per year of energy use (excluding standing charges)
Weighing Up the Pros & Cons of Ofgem’s New Low Standing Charge Energy Tariffs
The Pros:
- A 47% decrease (at least) in standing charge costs: Under October’s current price cap (ending 31st December 2025), standing charges cost £320 per year on average. Whereas, the new rules could see this reduced to £170 or even £120 per year. I’
- Available for everyone: Energy suppliers will be required to make the tariff available in all regions and to all customers, regardless of your meter type or payment method.
The Cons:
- Overall bill costs are unlikely to decrease: Distribution and other fixed costs have to be paid somehow, which is why Ofgem is likely to switch these costs to the unit rates on any low standing charge tariffs.
- Short-term solution: Ofgem has said these new tariffs are likely to end after two years while it carries out a deeper investigation into how costs should be allocated within the energy system. However, it will still have the option to review and extend the rules if required.
- You will have to proactively switch: If you want to take advantage of the lower standing charge, you will have to switch from your current tariff. We would advise comparing the total cost of switching to your current plan to check whether you’d be saving money or not first.
Struggling to Pay Your Energy Bills?
The cost of living keeps going up, and the UK’s debts are rising with it. While low-energy users could benefit from Ofgem’s new tariff rules, those who use more gas and electricity may soon be facing the harsh reality of higher per-unit charges.
If you’re struggling to pay your energy bills, you’re not alone. Higher living costs are also taking a toll on 12.1 million UK households at the moment. Debt advice could be the vital help you’re missing out on. Contact Angel Advance to receive free*, confidential debt advice from our friendly debt advisors today. Our approachable team is available to chat over the phone, via email, through WhatsApp, or in a webchat. We also have plenty of creditor debt help and advice on our website.
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Ofgem’s New Low Standing Charges: FAQs
If you switch to the new low standing charge tariff (with higher per-unit charges), and your energy usage is high, you may end up paying more overall.
However, if you’re a low energy user (e.g. you only put your heating on in the winter), switching to a lower standing charge tariff may work out cheaper for you overall despite the higher per-unit charges.
Yes, you will still receive any government-provided benefits you are entitled to, including the Warm Home Discount, Priority Services Register, etc.
