Some energy tariffs include a standing charge and others include the price in the energy unit price. A standing charge is basically to cover the costs associated with providing your energy supply e.g. the fixed costs. These costs would still apply even if you used no energy at all.
Should I only pick a supplier that doesn’t make a standing charge?
It depends, is the short answer. Suppliers who do not make a standing charge of your gas or electricity supply will often have a higher per unit price for the energy. So if you are a higher user of energy you could end up paying more.
To find out which tariff is best for your needs you should use our free energy calculator which takes in to account standing charges and the unit price of energy. That way you will get a personalised view as to which tariff will work out cheapest based on your households usage.
Why do some suppliers include a standing charge and others don’t
This is difficult to answer as it would be better for us all to understand and compare suppliers if they all charged in exactly the same way. However, if you are an energy supplier making it easy for customers to see that you are more expensive than another energy company is not always in your best interests. If consumers are a little confused about if they will be better off or not they are more likely to stay as they are – the industry calls this ‘inertia’ and these are your best customers as they will pay more for the same services than those who shop around.
Fortunately, energy calculators like ours can factor all of the factors into working out the best deal for you so it is still possible to shop around even if you haven’t the time to work out all the different deals. Its free to use and the savings might run into £100’s each year.