Millions of households across the UK are being warned that even as Ofgem’s latest price cap takes effect, prepayment customers continue to face some of the highest standing charges in the market. Consumer groups say this creates an unfair burden on lower-income families, many of whom already rely on prepayment meter tariffs to budget their energy use.
The price cap doesn’t cap everything
The Ofgem price cap limits the maximum unit rates and standing charges that suppliers can charge on default tariffs. However, it does not cap total bills, which depend on household usage.
While average annual bills are set to rise by around £100 from 1 October, standing charges remain a particularly sore point. For many prepayment customers, daily charges for simply being connected to the gas or electricity grid are now higher than those on direct debit.
This means even households using very little energy — such as pensioners or single-person homes — can end up paying disproportionately more.
Why standing charges matter
Standing charges are fixed daily fees added to energy bills, regardless of how much energy is consumed. They are intended to cover network maintenance, meter reading, and government-mandated schemes.
For electricity, average standing charges are now close to £200 per year. For gas, they are around £125. Together, these charges add more than £325 annually to a dual fuel household before a single unit of energy is used.
Prepayment customers pay the highest rates, despite being among the most financially vulnerable. Critics argue that this effectively penalises households who use less energy, while giving little incentive for suppliers to offer fairer alternatives.
Calls for reform
Charities and campaigners have long called for reforms to the way standing charges are applied. Suggestions include:
- Introducing a tiered structure that lowers charges for low-usage households.
- Removing standing charges entirely and moving costs into unit rates.
- Ensuring prepayment customers pay no more than those on direct debit.
So far, Ofgem has resisted major changes, saying standing charges ensure all customers contribute fairly to the upkeep of the energy network. However, campaigners insist the system is outdated and unfairly impacts those least able to pay.
How households can reduce the impact
While the structure of standing charges is set nationally, households are not powerless. Tariffs across the market still vary widely, and some suppliers are reintroducing fixed deals with lower overall costs.
Shay Ramani, CEO of Free Price Compare, explained:
“Households often feel trapped by standing charges, but switching can still make a difference. By comparing the full cost of tariffs — not just unit rates — customers can identify cheaper overall options. Even small savings matter when charges are this high.”
By carrying out an energy price comparison , households can see side-by-side how different tariffs balance standing charges and unit costs. In some cases, switching to a fixed deal can offset rising daily fees.
Why prepayment customers are hit hardest
Households using prepayment meter tariffs must pay upfront for energy, typically at higher rates than those on direct debit. When standing charges rise, these households see credit drained from their meter each day, even if they are not using much energy.
For families already struggling to keep meters topped up, this can lead to self-disconnection — where supply is cut off once credit runs out. Charities warn that as winter begins, more households risk going without heating or hot water because of this system.
Should you switch?
With new fixed tariffs returning to the market, many households are asking whether now is the right time to change suppliers. Deals up to 10–12% below the October price cap are available from certain providers, although eligibility often depends on region and payment method.
Shay Ramani advises:
“If you switch energy supplier , you won’t avoid standing charges completely, but you may find tariffs that soften the blow. Some fixed deals also protect you from further rises in the months ahead.”
Industry analysts agree that even modest monthly savings can add up significantly over the course of the winter, especially for those already under financial pressure.
Support still available
Households struggling with standing charges and high bills should also check for:
- Warm Home Discount (£150 rebate for eligible pensioners and low-income families).
- Winter Fuel Payments (up to £300 for older households).
- Supplier hardship funds and local council grants.
These schemes will not remove standing charges but can help offset their impact for the most vulnerable.
The bigger picture
The debate over standing charges is likely to continue into 2026. With arrears already at record highs and more than one million households behind on their bills, critics argue the current system is unsustainable.
Until reforms are introduced, households are urged to take proactive steps — from arranging repayment plans to comparing tariffs — to ensure they are not paying more than necessary.