Gas Standing Charge Scrapped 2027: Save £45 or Pay More?

Gas standing charge scrapped 2027: chain turning into golden birds over a British terraced street

The Budget on 28 October 2026 confirmed that gas standing charges, the fixed daily fee you pay even if you use no gas, will be scrapped and folded into the price of each unit, "in 2027 or as soon as possible after". The Treasury says 60% of households will save an average of £45 a year. Heavier gas users, mostly in bigger homes, are likely to pay a little more. It will not change your bill this winter. Below, we run the numbers at seven levels of gas use so you can see which side you are on.

29.68p
Average gas standing charge per day, Oct–Dec 2026 price cap
£108
What that adds up to in a year, before you use any gas
£45
Average yearly saving for 60% of households (Treasury)
11,500 kWh
Roughly where you break even, at typical use

What is changing, and when

Under Ofgem's price cap for 1 October to 31 December 2026, the average direct-debit gas standing charge is 29.68p a day and the unit rate is 7.97p per kWh, both including 5% VAT. Over a year the standing charge alone comes to about £108.33.

Chancellor John Healey called gas standing charges "unfair and outdated" and will ask Ofgem to remove them in 2027 or as soon as possible after. The money suppliers recover through the standing charge does not disappear; it moves into the unit rate. Electricity standing charges are also being looked at, but the government has said that is more complex and will take longer, and no date has been given.

The calculation: a higher unit rate, no daily fee

If the whole £108.33 is spread across a typical household's use of 11,500 kWh a year, the unit rate rises by about 0.94p, from 7.97p to roughly 8.91p per kWh. Uswitch reached the same estimate. That single number decides who wins:

Illustrative examples using today's average price cap rates (Oct–Dec 2026, direct debit, GB average). Real 2027 rates will differ; the price cap changes every quarter and Ofgem has not set the new structure yet.
Gas used a year Typical home Bill today Bill without standing charge Difference
2,000 kWh Gas hob only, or a tiny flat £268 £178 £89 less
4,000 kWh Small flat, low heating £427 £356 £71 less
7,000 kWh 1–2 bed, careful user £666 £624 £42 less
9,000 kWh Small house £826 £802 £24 less
11,500 kWh Ofgem typical household £1,025 £1,025 No change
14,000 kWh 3–4 bed house £1,224 £1,248 £24 more
18,000 kWh Large or poorly insulated home £1,543 £1,604 £61 more
Yearly change in your gas bill if standing charges move into unit rates
2,000 kWh: £89 less a year
4,000 kWh: £71 less a year
7,000 kWh: £42 less a year
9,000 kWh: £24 less a year
14,000 kWh: £24 more a year
18,000 kWh: £61 more a year
A home using 2,000 kWh of gas could save around £89 a year. A large home using 18,000 kWh could pay around £61 more.

The pattern is simple: the less gas you use, the more of your bill is the fixed charge, and the more you gain. Low users, people in small flats, single-person households and those who already ration their heating are the biggest winners in percentage terms. A family in a draughty three- or four-bed house that heats all day is likely to lose a little.

From The Matriarch's Money Reset

Whether you save £89 or pay £61 more, the change is small next to the real risk this winter: a bill that arrives bigger than the month you planned for. Seeing every bill in one place is what turns a shock into a line item.

The Matriarch Money Dashboard (Google Sheets & Excel) helps you:

  • Track gas, electricity and every other bill month by month, so you can see your real usage and cost trend
  • Plan a winter energy buffer before the January price cap and before the standing-charge change lands
  • See your whole household budget on one screen instead of in five apps and a drawer of letters

A digital Google Sheets and Excel file, nothing shipped, download right after purchase. Use it on your phone, tablet or computer. One-time purchase, no shipping fees.

See what's inside →

How to find out which side you are on (10 minutes)

  1. Find your annual gas use. It is on your annual statement or in your supplier's app, in kWh. If you only see monthly figures, add up the last 12 months.
  2. Compare it with 11,500 kWh. Below that, you are likely to gain. Above it, you are likely to pay a little more, all else being equal.
  3. Check your region. Standing charges and unit rates differ slightly by region, so your break-even point will not be exactly 11,500 kWh.
  4. Watch out for prepayment. Prepayment customers often feel standing charges most, because debt and the daily fee build up even when the meter is not being topped up. Removing the gas standing charge should help most of them, but the detail will depend on Ofgem's rules.
  5. Do not switch or fix just because of this. The change is not expected until 2027, and no supplier knows the new rates yet. Compare tariffs on their own merits.

What else is hitting energy bills

This change sits next to bigger numbers. The Budget also announced a £100 Household Energy Payment for around 20 million households in England in council tax bands A to D, paid from January 2027 (see our Budget 2026 breakdown). Before the Budget, we looked at whether energy bills could rise by 26% in January; Uswitch now estimates the January price cap could be about 27% higher, with Ofgem's official figure due in November. If you are on a low income, check whether you qualify for the £150 Warm Home Discount and Cold Weather Payments.

If you are already behind on energy bills, your supplier must offer you a payment plan you can afford. Citizens Advice and MoneyHelper both have free guides, and Ofgem's website explains your rights.

Quick answers

When will gas standing charges be scrapped?

The Treasury says it will ask Ofgem to remove them "in 2027 or as soon as possible after". No exact date has been set, so bills this winter are not affected.

Will I save money when the gas standing charge goes?

The Treasury says 60% of households will save an average of £45 a year. Using today's price cap rates, homes using less than about 11,500 kWh of gas a year are likely to save; homes using more are likely to pay a little more, because the cost moves into a higher unit rate.

Are electricity standing charges being scrapped too?

Not yet. The government has said it wants to remove them, but it is more complex and will take longer. No date has been announced.

If energy bills keep you up at night, try the free 7-Day Money Anxiety Reset journal.

Educational content only. Not personalised financial advice.