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Is a low standing charge cheaper than a low unit rate?

Compare two energy tariffs on your own annual usage, and find the usage level where a low standing charge stops being the better deal.

kWh
On your annual statement. A typical UK household uses around 2,700 kWh of electricity a year.
Tariff A
p/kWh
p/day
Tariff B
p/kWh
p/day
Cheaper for you Tariff B
You save per year £27.71
Tariff A, per year £914
Tariff B, per year £886
They cost the same at 2026 kWh

How this is worked out

An energy bill has two parts: a standing charge you pay every day regardless of usage, and a unit rate you pay per kilowatt hour consumed. A tariff with a low unit rate and a high standing charge only wins above a certain level of usage — below it, you are paying a large fixed fee to discount energy you never use.

What this assumes

  • Both tariffs are compared over 365 days with no exit fees, discounts or dual-fuel bundling.
  • Your usage is the same on both tariffs, which is not quite true if one is time-of-use and you can shift when you run things.
  • Prices hold for the full year. A variable tariff will move at the next cap change.

Questions

Why can I not just pick the lowest unit rate?

Because the standing charge is charged whether you use anything or not. A flat, well-insulated home, a second property, or anyone away for months can easily pay more on a headline-cheap tariff than on a boring one.

What counts as low usage?

Compare your annual kWh against the breakeven figure this gives you rather than against an average. Averages hide the fact that household usage ranges from under 1,500 kWh to well over 5,000.

Related tools

Sources

Last reviewed 21 August 2026. Reviewed every quarter, when the price cap changes.