Gas standing charges to be scrapped: what the Budget means for your energy bill

What's changing

Most homes on mains gas pay two things for it: a price for each unit used, and a standing charge, a fixed daily fee paid whether or not any gas is used. In the Budget on 28 October 2026, the Chancellor said standing charges will be removed from household gas bills in Great Britain for around 23 million homes.

The government has asked Ofgem, the energy regulator, to make the change by the end of 2027 or as soon as possible after. The fixed costs that the standing charge covers won't disappear: they will be added to the unit rate, the price you pay for each kilowatt hour of gas.

The announcement covers gas only. Electricity bills keep their standing charge for now, though the Budget says electricity standing charges will be reformed too, with details next year.

It's one of several energy measures in the Budget, alongside a £100 Household Energy Payment for homes in council tax bands A to D in England and 0% VAT on electricity until July 2027.

What you pay now

Under Ofgem's price cap for 1 October to 31 December 2026, the average gas standing charge for a home paying by Direct Debit is 29.68p a day, about £108 a year, and gas costs 7.97p per kWh. Electricity has a standing charge of 54.83p a day and costs 26.32p per kWh.

Your own figures can differ: standing charges vary by region and by how you pay, and Ofgem publishes them for every region.

Who saves, and who might pay more

Moving a fixed charge into the price per unit shifts the cost towards the homes that use the most gas. The Treasury's own estimate is that around 60% of households with a gas account could save, by an average of about £45 a year. So a sizeable minority would not see a saving, and some of those would pay more.

Homes that use little gas gain most, because they no longer pay a full daily charge for a small amount of gas. Homes that use a lot, for example larger or less well insulated homes heated by gas, are the most likely to pay more. The government says it will set out "targeted mitigation for a small number of households" in due course; it hasn't said yet who that covers or how it will work.

Homes without mains gas aren't affected.

What to do now

Nothing, for now. The change is aimed for the end of 2027 at the earliest, Ofgem still has to work out how it will be done, and your bill won't change because of it until then.

If you want a sense of where you'll land, look at your annual gas use in kilowatt hours on your bill or in your supplier's app. Ofgem currently treats 9,500 kWh a year as typical (medium) use for a home on gas, so a home using well below that is more likely to save.