Ofgem, the UK’s energy regulator, has launched a statutory consultation to require energy suppliers to offer at least one tariff with a lower standing charge. The consultation is open until 22 October 2025, with a final decision expected by the end of the year. If approved, these tariffs would be rolled out across Great Britain starting early 2026, giving households a new way to manage their energy costs by balancing fixed charges and per-unit rates.
What’s Being Proposed
The regulator is considering new licence conditions that would obligate domestic energy suppliers to maintain, at all times and in all regions, at least one tariff featuring a reduced standing charge. To ensure suppliers still recover costs, these tariffs would include a slightly higher unit rate.
Ofgem emphasizes that this is a short-term measure to expand consumer choice while a wider review of system cost allocation continues. The aim is not to reduce overall bills across the system, but to offer households more flexibility in how they pay for energy.
Who Can Access These Tariffs
The proposal applies to all domestic customers, including those on smart meters and traditional meters, regardless of payment method. Ofgem is also exploring a minimum consumption threshold to prevent potential misuse, such as by vacant second homes.
The consultation seeks input on key areas, including:
- Supplier eligibility
- Scope of tariffs
- Consumer protection measures, such as guidance on “reasonable unit rates” and clear communications
Important Dates
- Consultation publication: 24 September 2025
- Response deadline: 22 October 2025
- Decision expected: End of 2025
- Tariff availability: Early 2026, with suppliers expected to offer these tariffs across Great Britain by January 2026
What This Means for Consumers
Lower standing charge tariffs shift some costs from fixed charges to per-unit usage. This gives households more control over their bills, especially if they prefer to pay less in fixed monthly charges. However, Ofgem cautions that these tariffs may not reduce bills for all households, since the lower standing charge is offset by higher unit rates.
The initiative is primarily about choice and flexibility, allowing customers to select a tariff that better suits their energy consumption patterns, while ensuring suppliers remain financially resilient.
Frequently Asked Questions
What is a lower standing charge tariff?
It is an energy plan where the fixed monthly fee is reduced, but the cost per unit of energy is higher to maintain overall cost recovery.
When does the consultation close?
Responses must be submitted by 22 October 2025 via Ofgem’s Citizen Space or the email channels specified in the consultation.
When would these tariffs become available?
Ofgem aims to publish a final decision by year-end 2025, with tariffs available in the market from early 2026, and suppliers ready across Great Britain by January 2026.
Who is eligible?
All domestic consumers, regardless of meter or payment type, with Ofgem reviewing a minimum usage threshold to ensure fairness.
Will bills go down?
Not necessarily. The tariffs are designed to offer more payment options, not to reduce bills universally. Households that consume less energy may benefit, while higher-use households could see little change.
