Energy bill standing charges to be cut from April – but not all will see savings
Fixed charge rates on energy bills will be reduced from April this year as the government tells providers to change the way they bill customers.
From April 1, energy suppliers must start covering the costs of the warm home rebate scheme from the unit price of electricity rather than a fixed charge.
This would reduce the charge for all households by £39 per year. However, as the cost is transferred to the unit rate, this will be reflected in the amount paid for energy use and will disappear for the average household.
However, those with low energy use will still save money as they will only be charged for the electricity they use and may pay a lower flat rate.
The move comes on top of Rachel Reeves’ Budget pledge to cut household bills by £150 a year by scrapping the energy efficiency scheme.
In the consultation on changing the fixed charge, the department gives the example of a “high-use, electric-heated home” which, when taken together, would save around £395 on energy bills next year.
The Department for Energy Security and Net Zero (DESNZ) report added: “This shift is also in line with the government’s manifesto commitment to reduce fixed charges, as well as wider efforts to improve transparency, consumer choice and fairness in energy pricing.”
The fixed charge on the energy bill paid by all households represents the basic amount that must be paid to the supplier even if no electricity is used. Under the current Ofgem price cap, the average household pays around 55p a day for electricity and 35p for gas; This works out to £328 a year.
Reacting on social media, money-saving expert Martin Lewis said: “It’s only a small step, but it’s good to see some movement in the right direction. I think it’s a totem of the direction of travel and when I’ve spoken to both Ed Miliband and the Ofgem boss about it, I think they’re hearing the mood music on the onslaught.”
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“The rolling charge is a moral hazard that discourages lower usage and keeps bills high for people who use very little energy. This is by a mile the biggest complaint I get about energy bills.”
“Paying more than £300 a year for a power plant is too much. It also penalizes people, especially the elderly, who don’t use gas in the summer but still pay for gas every day.”
Minister for Energy Consumers, Martin McCluskey, said: “This government is relentlessly focused on the cost of living, which is why we have taken action to shave an average of £150 off energy bills from April.
“We are also acting to make our energy system fairer. We know that fixed charges are a major concern for many households, especially those on low incomes.
“That’s why we decided to reduce these fixed costs, create a fairer system and provide savings to households that use less energy.”
This article was modified on February 13, 2026. It was initially stated that the changes to fixed charges would save all UK households an average of £40 a year from April, but this was incorrect. While DESNZ said homes with low energy use would benefit the most from the change, it did not release information on whether or how it would affect other homes.
