Chancellor of the Exchequer John Healey announced on Wednesday morning, before presenting the Budget, that the government will abolish the standing charge on household gas bills. This is a fixed amount added for every day, regardless of how much gas you use.
According to the government, the typical household currently pays around £108 a yearin standing charges. The change will cover around 23 million homes. The fixed costs will not disappear – they will be moved into the unit price of gas. The government estimates that 60% of households will save £45 a year on average.
The Chancellor has asked the energy regulator Ofgem to introduce the change in 2027 or as soon as possible afterwards. The government admits that some homes will not see an automatic saving. It has announced separate, targeted support for a small group of households – but has not yet given details.
The government also points out that VAT on electricity was cut at the start of October, which it says reduced the energy price cap by £45 a year. The announcement says nothing about the standing charge on electricity.
What it means for you
If you use a lot of gas because you have a large home and gas heating, you may pay about the same or more – the higher price per kWh will eat up the saving. Those who use little gas will gain most: flats, small houses and people who save on heating. This matters for those who only use gas for cooking – today they pay the standing charge all year round.
The announcement concerns household bills. It does not mention business bills.
Our assessment
This is a plan for 2027, not a cut from tomorrow. The change is easy to understand and gives more control over your bill: use less, pay less. Its effect, however, depends on how Ofgem recalculates the new rates. We will only see the details in the regulator’s decision and the Budget documents.
What to do
- Check your latest bill to see how much you pay in gas standing charges each year and how many kWh you use.
- If you are on a fixed tariff, check its end date – the change will only affect you when new rates apply.
- Follow the regulator’s announcements: Ofgem.
- Full government announcement: GOV.UK – standing charges on gas bills.
Source: GOV.UK, HM Treasury (28 October 2026).
We assess factual corrections and substantive responses. Verified changes are reflected in our reporting.
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