Energy Standing Charges to Be Reduced from April, Yet Savings Will Not Be Universal
The government has confirmed that standing charges on energy bills will be cut starting from April this year, following directives to energy suppliers to alter their billing practices. From 1 April, providers are instructed to recover costs associated with the warm home discount scheme from the electricity unit rate instead of the standing charge.
This adjustment is projected to lower the standing charge by £39 annually for all households across the UK. However, because these costs are being transferred onto the unit rate, which charges based on energy consumption, the average household is unlikely to experience any net savings, as the reduction in the standing charge will be offset by higher usage costs.
Low-Usage Households to Benefit Most
Despite the lack of overall savings for typical users, households with low energy consumption are expected to see genuine benefits. These consumers will pay a reduced standing charge while only being billed for the electricity they actually use, leading to lower total bills.
This change builds upon Chancellor Rachel Reeves's Budget commitment to reduce household energy expenses by £150 per year through the elimination of an energy efficiency programme. When combined, these measures could result in savings of approximately £395 next year for high-usage households, such as those relying on electric heating, according to government examples.
Government and Expert Reactions
The Department for Energy Security and Net Zero (DESNZ) stated that this shift aligns with the government's manifesto pledge to lower standing charges and efforts to enhance transparency, consumer choice, and fairness in energy pricing. Standing charges, which all households must pay regardless of energy usage, currently average around 55p per day for electricity and 35p for gas under the Ofgem price cap, totalling £328 annually.
Money-saving expert Martin Lewis responded positively on social media, describing the move as a "baby step" in the right direction. He emphasised that standing charges are a significant concern, particularly for low-energy users and older individuals who may not use gas in summer but still incur daily charges. Lewis noted, "The standing charge is a moral hazard that disincentivises lower usage and keeps bills high for people who use very little energy."
Minister for Energy Consumers Martin McCluskey highlighted the government's focus on cost-of-living issues, stating, "We know that standing charges are a big concern for many households, especially those on low incomes. That is why we have taken the decision to bring down these fixed costs, creating a fairer system and delivering savings for households who use less energy."
Clarifications and Context
It is important to note that initial reports suggesting all UK households would save an average of £40 annually from April were inaccurate. DESNZ has clarified that while low-usage homes will benefit most, the impact on other households remains unspecified. This article was amended on 13 February 2026 to reflect this correction, ensuring accuracy in reporting the nuanced effects of the policy change.
