NextFin news, On Wednesday, September 24, 2025, the UK energy regulator Ofgem revealed plans that will require all major household energy suppliers to offer at least one tariff featuring lower standing charges by the end of January 2026.
Standing charges are fixed daily fees added to gas and electricity bills, intended to cover the costs of connecting homes to the energy system and investing in infrastructure upgrades. Ofgem's move responds to consumer complaints that low energy users are disproportionately penalised by these fees.
Tim Jarvis, Ofgem's director general of markets, stated, "We've listened to thousands of consumers that wanted to see changes to the standing charge and taken action. We believe the right way forward is to require all major suppliers to offer at least one tariff with a lower standing charge, delivering the choice customers want without making high energy users worse off."
However, Ofgem acknowledged that reducing standing charges will likely be offset by higher unit energy prices, meaning overall bills may not decrease. The regulator emphasized that these changes are about providing payment options rather than cutting costs.
The regulator dropped earlier proposals that could have eliminated standing charges entirely for some deals, due to concerns about cost redistribution and fairness.
The new tariff requirement is part of a short-term measure while Ofgem conducts a broader review on how to fund necessary grid upgrades, including energy storage, to support the UK’s green energy transition.
This announcement comes as approximately 34 million UK households prepare for a 2% increase in the energy price cap starting October 1, 2025. Around 20 million customers on fixed-rate tariffs will not be affected by this cap change.
Consumer groups like Which? have advised customers to carefully assess their energy usage before switching tariffs, as lower standing charges benefit mainly very low energy users.
Ofgem plans to finalize the decision by the end of 2025, with the new tariffs expected to be available from late January 2026.
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