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The Octopus Low Standing Charge tariff is a limited trial for households that dislike paying a daily charge before using any energy. It reduces the amount collected through standing charges and moves more of the cost into the price paid for each unit of electricity or gas. That change sounds attractive, but it does not automatically make energy cheaper. The tariff is mainly relevant to homes with low consumption that still meet the minimum usage rules. This guide reflects information published on 7 July 2026.
A standing charge is the daily amount added to an energy account regardless of consumption. It contributes towards maintaining electricity and gas networks, operating meters, supporting industry schemes and supplying a property. These costs do not disappear when the standing charge is reduced. Under the trial, more of them are recovered through higher unit rates. Customers therefore pay less simply for remaining connected, but more whenever they use electricity or gas. It is a different method of dividing the same costs between the fixed and variable parts of a bill.
Ofgem began reviewing standing charges after strong criticism from households and consumer groups. Many people objected to paying substantial daily charges even when they had reduced their energy use. The regulator originally considered requiring major suppliers to provide a lower standing charge option. Concerns were raised that shifting costs into unit rates could penalise households with high energy needs, including some disabled people, families with young children and residents of inefficient homes. Ofgem instead launched a one year pilot involving several large suppliers. Octopus, British Gas, EDF and E.ON were among the first participants. The purpose is to observe customer demand, bill outcomes and whether people understand the trade between standing charges and unit prices.
A household taking both electricity and gas can expect standing charges to be about ยฃ150 lower over a year than under the relevant price cap arrangement. The saving is divided between the two fuels, so an electricity only or gas only customer may receive a smaller reduction. This figure describes the reduction in standing charges, not the reduction in the total bill. Higher unit prices can absorb the entire ยฃ150 and may leave the household paying more overall. The precise rates vary by region, fuel, meter arrangement and quotation. Octopus customers should use the figures displayed during switching rather than relying on a national average.
Octopus is limiting its trial to 33,000 homes. New and existing customers may be offered the tariff during the quotation or switching journey if their account meets the requirements and spaces remain available. The trial includes minimum consumption rules. A household using less than 666 kilowatt hours of electricity a year, or less than 2,836 kilowatt hours of gas, cannot join. Ofgem included these requirements so the study represents occupied homes rather than properties with exceptionally low use, such as some second homes. Meter type also affects eligibility. Octopus notes that customers may not see the tariff if their meter arrangement is unsuitable, with prepayment given as an example. Failure to see it does not necessarily indicate a fault. The household may be outside the criteria or the trial may have reached capacity.
Octopus provides a warning for anyone considering the tariff. As a general guide, customers using more than 1,800 kilowatt hours of electricity or 7,500 kilowatt hours of gas each year are likely to lose the ยฃ150 standing charge reduction through higher unit costs when compared with the company's current fixed tariff. These are guidance figures rather than a promise of savings below them. Regional rates, the fuels taken, actual consumption and the alternative tariff used for comparison all influence the result. A household should examine electricity and gas separately. Low electricity consumption does not guarantee a saving if gas use is high, and the reverse is also true. Dual fuel customers need to assess the combined annual cost.
The tariff may suit a small, efficient home with modest consumption, particularly where residents are often away or use little heating. It may also appeal to people who prefer paying in proportion to consumption rather than facing a large fixed daily amount. A low use household still needs to exceed the trial minimums. Some extremely low use properties will therefore be excluded even though their consumption pattern might otherwise appear suited to a lower standing charge. Households with electric heating, heat pumps, electric vehicles, medical equipment or several occupants should approach the tariff carefully. Their higher consumption could make the increased unit rate more significant than the standing charge saving.
The best comparison uses twelve months of meter data. Multiply annual electricity consumption by the quoted electricity unit rate and add 365 days of electricity standing charges. Repeat the calculation for gas. Compare that total with Flexible Octopus, the current fixed tariff and any specialist tariff that fits the home. An electric vehicle, heat pump, storage heater, solar array or battery can make a time based tariff more suitable than either a conventional fixed deal or the standing charge trial. Do not compare monthly Direct Debit amounts. A Direct Debit is a payment plan based on estimated use and account balance, not the tariff price itself. The Ofgem price cap from 1 July to 30 September 2026 uses national average Direct Debit rates of 26.11 pence per kilowatt hour for electricity and 7.33 pence for gas. Average standing charges are 57.19 pence a day for electricity and 29.04 pence for gas. These figures provide useful context, although an Octopus quotation will vary by region.
The Low Standing Charge tariff gives selected customers more choice over how fixed energy costs appear on their bills. It can reduce the daily burden for some low consumption homes, but it is not designed as a universal saving product. Its value depends on the balance between lower standing charges and higher unit prices. Customers should calculate the full annual cost using their own usage before joining, then continue checking consumption after the switch. The tariff is best understood as a controlled pricing experiment, not a simple route to cheaper energy.
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