Written by Mark Munnelly ACA, Director, Cubed Consultancy · Updated October 2026
The gas standing charge, the fixed daily fee on every household gas bill, is being scrapped. The Treasury announced the change on 28 October 2026, ahead of Chancellor John Healey’s first Budget. He will ask Ofgem to remove them in 2027 or as soon as possible after. Most homes should pay a little less. The cost does not disappear, though, and heavy gas users and businesses are in a different position.
Gas standing charges: key facts (October 2026)
- The gas standing charge under the current price cap is 29.68p a day including VAT, about £108 a year (Ofgem).
- The Treasury says around 60% of households would save about £45 a year once the charge goes (Treasury, 28 October 2026).
- Removal is planned for 2027 or as soon as possible after, through Ofgem. No exact date has been set.
- The cost moves onto the unit price of gas, estimated at around 1p more per kWh (MoneySavingExpert).
- Business energy customers are not protected by the energy price cap, and nothing has been announced for business gas contracts (Ofgem).
Are gas standing charges being scrapped?
Yes, gas standing charges on household bills are being scrapped. The Treasury confirmed on 28 October 2026 that the Chancellor will ask Ofgem, the energy regulator, to remove them. Healey said the charges are “unfair and outdated”.
The change covers homes in England, Scotland and Wales. Northern Ireland has a separate energy market, and the announcement does not yet say how it will be treated there. It has also not been confirmed whether every tariff and payment type, such as fixed deals and prepayment, will be included (MoneySavingExpert).
When will gas standing charges be removed?
Gas standing charges will be removed in 2027 or as soon as possible after, but no exact date has been confirmed. Ofgem has to make the change through the energy price cap, which is updated every three months.
Until then, bills carry on as now. Under the price cap for October to December 2026, the gas standing charge is 29.68p a day including VAT. The gas unit rate is 7.97p per kWh (Ofgem).
How much will scrapping gas standing charges save?
Scrapping gas standing charges will save around 60% of households about £45 a year, by the Treasury’s estimate. The saving is smaller than the £108 charge itself because the cost of running the gas network still has to be paid.
That cost moves into the price you pay for each unit of gas. MoneySavingExpert estimates the gas unit rate would rise by around 1p per kWh, from 7.97p to roughly 9.11p at today’s prices. Low users pay less overall, because they no longer cover a fixed daily fee for gas they hardly use.
Who will pay more when gas standing charges go?
Households that use more gas than average are likely to pay more when gas standing charges go. Their extra spend on unit rates can be bigger than the standing charge they no longer pay.
Two invented examples show how it works, using today’s prices and MoneySavingExpert’s estimate of an extra 1.14p per kWh. A household using 6,000 kWh of gas a year stops paying the £108 standing charge and pays about £68 more on units. It ends up about £40 better off. A household using 15,000 kWh pays about £171 more on units, so it ends up about £63 worse off. On these figures, the break-even point is around 9,500 kWh a year.
The Treasury says it will set out “targeted mitigation for a small number of households” later. That is likely to focus on vulnerable households with high gas use, but the details have not been published.
Will business gas standing charges be scrapped?
No, nothing has been announced for business gas standing charges, and the announcement is about household bills. Business energy works differently, because “business energy customers are not protected by the energy price cap” (Ofgem). Standing charges on a business contract are set by the supplier in the contract itself.
A shop, café, workshop or office on a business gas contract should therefore expect no change from this announcement. When the contract comes up for renewal, it is still worth comparing suppliers on both the standing charge and the unit rate.
The Budget documents published on 28 October may add detail for businesses. We will update this article if they do.
Does this change what self-employed people can claim for working from home?
No, scrapping gas standing charges does not change the rules on claiming for working from home. Self-employed people can still choose between the actual business share of their household costs and HMRC’s flat rates.
The monthly flat rates are £10 for 25 to 50 hours of business use at home, £18 for 51 to 100 hours and £26 for 101 hours or more (GOV.UK). They save you splitting utility bills between business and personal use. If you work out the actual business share instead, your gas bill will look different once the standing charge goes. Keep the bills and a note of how you worked out the share.
What happens to electricity standing charges?
Electricity standing charges stay for now. Under the current price cap, the electricity standing charge is 54.83p a day (Ofgem). MoneySavingExpert reports that the government plans to set out reforms to electricity standing charges next year.
The government has separately cut VAT on household electricity bills to zero until 31 March 2027, while gas bills still carry 5% VAT.
Frequently asked questions
What is a gas standing charge?
A gas standing charge is a fixed daily fee on a gas bill that is paid whether or not any gas is used. It covers fixed costs such as building and maintaining the energy network. Under the current price cap it comes to about £108 a year.
Do I need to do anything now about gas standing charges?
No, households do not need to do anything now, because the change will be made through the price cap from 2027 at the earliest. If you are on a fixed tariff, check whether a new deal would still suit you once the charge has gone. High users may pay more.
Does this apply to landlords and tenants?
Yes, the change is aimed at household gas bills, whoever pays them, although it has not yet been confirmed whether every tariff and payment type will be included. Some tenants pay their landlord for energy supplied through a business contract. In that case the price cap rules do not apply in the same way, and the landlord’s contract terms matter.
Are the figures in this article from real clients?
No, the figures in this article are not from real clients. The two households in the example are invented to show how the change could work. They use Ofgem’s current prices and MoneySavingExpert’s estimate of the new unit rate.
Will this article be updated after the Budget?
Yes, we will update this article once the Budget documents are out and Ofgem sets out how and when the change will happen.
For the other changes small businesses are watching in this Budget, see our guide to business rates and the Budget.
Work from home, or run a business with its own gas contract? ask our tax advisers in Harpenden how the change affects your costs and what you claim.
This article is general information, not advice. It reflects the Treasury announcement, Ofgem’s published prices and reports as of 28 October 2026.
