Unit rates and standing charges explained

What is a unit rate?

A unit rate is the price you pay for each kilowatt-hour (kWh) of energy you use, usually shown in pence per kWh. Under the price cap from 1 October 2026 to 31 December 2026, the GB average Direct Debit unit rate is 26.32p per kWh for electricity and 7.97p per kWh for gas.

The more energy you use, the more unit charges you pay. That is why the price cap does not cap your total bill: it limits the rate, not the number of units.

What is a standing charge?

A standing charge is a fixed daily amount. It applies on every day of your billing period, including days when you use no energy at all. The GB average is 54.83p a day for electricity and 29.68p a day for gas.

Over a year that adds up to £200.13 for electricity and £108.33 for gas: £308.46 for a dual-fuel home before a single unit is used.

How standing charges vary by region

Ofgem sets a separate cap for each of Great Britain’s 14 regions, and standing charges vary more than unit rates. This quarter the lowest electricity standing charge is in London at 42.92p a day and the highest is in Merseyside and Northern Wales at 67.66p, a difference of £90.30 a year.

Gas standing charges sit in a much narrower range, from 29.16p a day in Southern England to 30.20p in London. Compare every region’s rates, or open your region’s page for a full breakdown, such as London.

How to work out your annual cost

For a single-rate tariff that stays the same all year, multiply your annual usage by the unit rate, then add 365 days of standing charges. If your rates are in pence, divide by 100 to get pounds.

Using the GB average electricity rates and Ofgem’s typical use of 2,500 kWh: 2,500 kWh × 26.32p = £658.00, plus 365 × 54.83p = £200.13, gives £858.13 a year. The same sum for gas at 9,500 kWh gives £865.48.

Our energy bill calculator does this for you with the rates and usage on your own bill. It assumes your rates stay the same for a full year, so recalculate when your tariff changes.

Why standing charges matter most to low users

Because the standing charge is fixed, it makes up a bigger share of the bill for homes that use less. At Ofgem’s low electricity use of 1,600 kWh a year, the standing charge is about 32% of the electricity bill at GB average rates. At high use of 3,800 kWh, it falls to about 17%.

If you use very little energy, compare standing charges carefully when you look at tariffs. If you use a lot, the unit rate usually matters more.

What else affects your rates

Your region, payment method and meter all change which rates apply. Our household figures are for Direct Debit with a single-rate electricity meter. Standard credit and prepayment have different cap levels. With Economy 7 or another multi-rate tariff, work out each rate period separately; Ofgem says the rates together cannot be more than the price cap.

Check the tax basis too. From 1 October 2026 to 31 March 2027, household electricity in Great Britain carries 0% VAT, while gas rates include 5% VAT. Read about the electricity VAT cut.

Fixed-term deals are not covered by the cap, so their rates can be higher or lower than the capped figures. Compare the unit rate and standing charge together, using your own usage, rather than looking at one number alone.

Frequently asked questions