Government plans to scrap gas standing charges for about 23 million homes

The UK government has announced plans to abolish standing charges on household gas bills. The news was published on 28 October 2026, the day of the Budget. The change is expected to affect around 23 million homes.

What is changing

A standing charge is a fixed daily fee added to a bill regardless of how much gas is used. A household that uses no gas at all must still pay it.

Chancellor John Healey is to ask the energy regulator, Ofgem, to deliver the change in 2027 or as soon as possible after. According to the government, the typical household currently pays an average of £108 a year in standing charges alone.

The costs will not disappear entirely. They are to be added to the unit rate, the price paid for gas actually used.

How much could be saved

HM Treasury calculations suggest that bills for 60% of account-holding households would fall by an average of about £45 a year. The remaining households will not see an automatic saving, but the government says they will still have better control over their bills. It has also promised to set out targeted support for a small number of households in due course.

Healey called gas standing charges "unfair and outdated". Prime Minister Andy Burnham spoke of "basic fairness" and of reforming the energy market. Greg Jackson, chief executive of Octopus Energy Group, said most customers would see lower gas bills.

Background

The government points out that a VAT cut on electricity bills has been in force since the beginning of October 2026. According to the announcement, the Energy Price Cap from October is £45 a year lower than it would have been without the cut. Last week it also announced a new Energy Wealth Fund, intended to support investment in cheap, clean power.

What this means for you

The change applies to gas bills in homes across the UK, so it would also affect people who hold their own account with a supplier. It will not happen immediately: Ofgem has yet to implement it, and the government is talking about 2027 or later. The size of any saving depends on gas use and tariff. Some households will not gain automatically, and details of support for them are not yet known.