Autumn Budget 2026: Government to scrap gas standing charges

The Chancellor, John Healey, will announce in today's Autumn Budget that gas standing charges will be scrapped in England, Scotland and Wales.

Customers have long considered daily energy standing charges to be unfair because they have to be paid regardless of whether any energy is used or not.

The Treasury says that this will save 60% of households £45 per year on their energy bills. However, the change won’t come into effect until at least 2027, and will benefit low usage customers more than high usage customers because standing charge costs will be transferred into unit rates.

Healey said: “Gas standing charges are unfair and outdated, so I am scrapping them to give millions of households a bit of breathing space.

“My budget will draw a line in the sand on an energy policy that has failed British billpayers for years, letting extra costs on bills pile high and leaving households even more exposed to global shocks.”

Richard Neudegg, director of regulation at Uswitch.com, says: “Moving gas standing charges onto the unit rate is a sensible idea for the longer term.

“Paying a daily gas standing charge can grate for households that use very little gas, and can feel illogical over the summer or when homes have the heating off.

“Households that use less gas, such as those living in smaller homes, should benefit when this comes in. It will also give relief to those who have switched to electric heating but kept a gas connection and find themselves paying a standing charge for a service they don’t use for heating.

“But these costs won’t disappear. They’ll move into the price of each unit of gas, meaning that those using a lot of gas could be worse off.

“Based on current rates, a household using 7,000 kWh of gas a year could be about £40 better off under these changes, while a home using 14,000 kWh could be £25 worse off.

“The Treasury says these changes will happen ‘in 2027 or as soon as possible after’. In the meantime, consumers face a difficult winter with further price cap increases on the horizon. We’ll wait to see how the energy package in the budget looks as a whole later today.”

How much is the gas standing charge currently?

Gas standing charges vary slightly by region, but if you’re on the price cap, the average cost for a typical household is 29.68p per day, which comes to £108.33 per year (including 5% VAT, which is still in place for gas).

Who will be better or worse off?

While the gas standing charge will be scrapped, its costs will be added to unit rates instead. This will benefit households with lower gas use but potentially mean that those with higher gas use will pay more.

For example: moving the average £108.33 standing charge into unit rates would add roughly 0.94p per kWh, taking the rate from 7.97p to about 8.9p. That means a home using 7,000 kWh a year would be about £40 better off, and one using 14,000 kWh would be about £25 worse off. The break-even point is around 11,500 kWh, which is a typical household’s usage as defined by Ofgem.

(This is a Uswitch calculation, not a forecast. It assumes the full standing charge moves into gas unit rates and ignores regional differences)

When will gas standing charges be scrapped?

The change is likely to happen in 2027, so households won’t see it on their bills this winter.

What about electricity standing charges?

The government is reportedly also looking at ways to scrap the electricity standing charge, but this works slightly differently and will take longer to work out.

What’s happening to energy prices this winter?

The energy price cap is due to increase by an estimated 27% in January (to be announced in November).