MoneySavingExpert founder Martin Lewis has said he gets more complaints about standing charges than anything else relating to energy bills. You pay them just for the facility of having gas and electricity, whether you use a single unit or not.
Since the summer, Ofgem has been running something new in response, a live pilot testing tariffs with lower standing charges. It’s not a blanket change, and it’s not free money. Here’s what it involves:
What’s On Offer
Ofgem launched a limited one-year pilot in June and July, with several major suppliers offering a lower standing charge options rather than fully removing them. Octopus, British Gas, EDF and E.ON are taking part, with the trial having started from June, and Octopus launching its version in July.
The mechanism differs by supplier. EDF is offering a flat £6.25 monthly discount on the standing charge per fuel type, saving around £150 a year on fixed fees, but it’s tied to EDF’s existing time-of-use “FreePhase” tariff, so you’ll need to shift usage away from peak hours to actually come out ahead, rather than it being a simple set-and-forget saving. E.ON and Octopus have chosen to lower their daily standing charges directly, with unit rates rising in both cases to cover the difference. British Gas has confirmed it’s joining and may already be offering it quietly to a small number of eligible customers, though there’s nothing on their public site confirming this yet.
The offer isn’t identical across suppliers either. Octopus’s version is capped at 33,000 households and open to new and existing customers, while E.ON’s is a smaller trial only offered to 25,000 randomly selected existing customers.
The Catch
Ofgem has been clear that these tariffs may not lower your total bill, since suppliers are expected to charge higher unit rates in return. Lowering the standing charge and raising the unit rate isn’t a straightforward saving, it’s a redistribution. Whether it helps you specifically depends entirely on how much energy you use.
E.ON says that, for reference, an average household with two to three people uses around 2,500 kWh of electricity and 9,500 kWh of gas a year, according to Ofgem, and that those using under 1,800 kWh electricity and 7,500 kWh gas a year would pay less than on the standard fix. Meaningfully below the typical household figure, so this is built for genuinely low-usage households, not the average one.
There’s a lower bound too, which is easy to miss. Octopus requires you to use more than a minimum amount of electricity, since Ofgem wants people on the tariff to represent a normal household rather than one with abnormally low consumption, like a second home. In practice, that means the tariff is aimed at a specific band of usage, low but not empty-property low, rather than everyone below the upper threshold.
Who This Is Actually Aimed At
The households most likely to benefit are the ones standing charges have historically penalised the hardest, people in small, efficient homes with a real but modest day to day usage, not second properties sitting empty. If that sounds like your situation, for instance if you live in a well-insulated flat with low heating needs, this is worth a proper look rather dismissing as another energy tariff gimmick.
If your usage is closer to or above the national average, the maths is much less likely to favour switching.
How to Check if You’re Eligible
Each supplier is handling enrolment differently. Octopus customers can check eligibility directly in the app or online account, while EDF and E.ON are rolling theirs out to eligible customers directly, so it’s worth watching for an email from your supplier rather than searching for a public sign-up sheet, since one may not exist for every provider. Worth also noting that Octopus’s trial locks you into a fixed one-year deal, with £50-per fuel exit fees if you leave early, so it’s not a no-strings trial you can back out of freely. E.ON’s commitment is longer still: a 24-month fixed contract with £100-per-fuel exit fees, so it’s worth weighing that lock-in against the potential saving before opting in. If you’re not with one of these four participating suppliers, this pilot won’t be available for you at this time.
The Practical Takeaway
This isn’t a fix for the wider cost of energy, and it won’t undo a price cap rise. It’s one narrow tariff option, aimed squarely at a specific band of low-usage households, being tested at scale before Ofgem decides whether to make it permanent. If you think you might qualify, it’s worth checking your eligibility, ideally against your actual usage over the last twelve months rather than a rough guess.
Which raises the obvious question: how do you know where your usage stands, and whether a tariff like this would beat what you’re already on?
That’s exactly the kind of decision Hugo Energy’s Tariff AI is built to answer. Rather than manually comparing your own usage against a pilot’s eligibility thresholds, Tariff AI analyses up to a year of actual smart meter data and scans every available tariff in your postcode to tell you whether switching would genuinely save you money for your specific household. It’s an independent comparison, with no supplier commissions involved, so the recommendation is based on what’s actually better for you, not what pays the most. It’s available for £2.99 a month as part of your Hugo Energy subscription.
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