The short version
- Gas standing charges on home bills in Great Britain are being abolished, aiming for the end of 2027 or as soon as possible after.
- The cost, about £108 a year now, moves into the gas unit rate. Estimates put the rise at about 0.9p to 1.1p per kWh.
- You gain if you use less gas than the break-even point, roughly 9,500 to 12,500 kWh a year. The government says about 60% of households will save, by £45 a year on average.
- Electricity standing charges stay for now. Reform details are due next year.
- Nothing changes this winter. The January price cap, forecast about 27% higher, matters far more to your bill right now.
What the Budget announced
In the Budget on Wednesday 28 October 2026, Chancellor John Healey said the government has asked Ofgem to abolish gas standing charges on domestic energy bills in Great Britain. “Gas standing charges are unfair and outdated so I am scrapping them,” he said. Prime Minister Andy Burnham called it “about basic fairness and giving people more control over their bills.”
The Budget document is specific about how it works. Gas standing charges are “currently £108 a year on average for the typical billpayer”, and “Ofgem will ensure that energy suppliers recover these costs through gas unit rates instead.” In other words, the money still gets collected. It just gets collected per kWh you burn rather than per day you're connected.
The government says about 23 million homes have a gas standing charge, and that around 60% of account-holding households would save an average of £45 a year. It also accepts some households will pay more, and promises “targeted mitigation” for them, with details to follow.
It's one of several energy measures in the Budget. The others include extending 0% VAT on electricity to 1 July 2027 and a £100 Household Energy Payment for council tax bands A to D in England. We've rounded them all up in our Budget 2026 energy bills report.
When it happens: not this winter
The Budget's wording is “aiming for delivery by the end of 2027 or as soon as possible after then”. The Treasury's press release puts it as “in 2027 or as soon as possible after”. Ofgem has to work out the method, consult suppliers and consumer groups, and build it into the price cap, which is reset every three months.
Martin Lewis's guess is that it arrives with the 1 October 2027 or 1 January 2028 price cap. Either way, your gas standing charge stays in place through this winter and next spring. Here's where it sits in the timeline of changes already announced:
How the cost moves into the unit rate
A gas bill has two parts: a standing charge, a fixed amount for each day you're connected, and a unit rate, the price of each kWh of gas you use. At the current cap they are 29.68p a day and 7.97p per kWh, both including 5% VAT. Our standing charges guide explains what the daily charge pays for: the gas network, meters, and the cost of supplier failures.
Those costs don't vanish. Ofgem will move them into the unit rate. How much the unit rate rises depends on how many kWh Ofgem spreads the £108 across, and it hasn't said yet. Three estimates have been published:
The arithmetic behind all three is the same: break-even usage = the standing charge you no longer pay ÷ the extra you pay per kWh. £108.33 divided by 1.14p is about 9,500 kWh. Divided by 0.87p it's about 12,500 kWh. Use less than the break-even and you're better off; use more and you're worse off.
The reason the estimates differ is that Ofgem's “typical” household (9,500 kWh since July 2026) isn't the same as the average across all gas customers. A small number of very large users pull the average up, and if Ofgem spreads the cost over actual average use the per-kWh rise is smaller and the break-even point is higher. That choice decides how many people win.
Who wins and who loses
Here's what the change would mean a year at today's prices, using the £108.33 current gas standing charge and each of the three published uplifts. These are estimates, not forecasts: actual rates will depend on Ofgem's method and on wholesale prices at the time.
Our calculation: £108.33 standing charge saved minus annual use × uplift. Uswitch's own figures (7,000 kWh about £40 better off, 14,000 kWh about £25 worse off) match the middle column.
Likely to gain
- Flats and small homes with modest heating needs
- Homes that only use gas for a hob, or keep gas but rarely use it
- People who've switched to a heat pump or electric heating but kept the gas connection
- Second homes and properties empty for long spells
- Careful users who already keep the heating low
Likely to pay more
- Large, older or poorly insulated gas-heated houses
- Big households and people at home all day
- Anyone who needs the heating high for health reasons, which is why the government has promised “targeted mitigation”
Martin Lewis's read is that about 60% of people will pay less and 40% more. Nesta, the innovation charity, estimates 63% of dual-fuel households would be better off, by about £27 a year at current prices, and that the majority in every income group under £100,000 would benefit. The policy is popular: 95% of the 52,000 people who answered a Martin Lewis poll supported cutting or scrapping standing charges, even if the cost moved to the unit rate.
There's a second effect that's easy to miss. With no daily charge, every kWh you save is worth about 1p more than it is now. Turning the thermostat down, fixing draughts or running a few of these savings will pay back slightly faster. That's the “more control over your bills” argument ministers made.
Work out your own number
Your annual gas use in kWh is on your annual statement, or in your supplier's app. If you only have a monthly figure, multiply a winter month and a summer month by six each and add them together. Gas meters measure in cubic metres or cubic feet; your bill will already show the kWh conversion.
Then put it into our gas standing charge calculator, which runs all three estimates against your own usage and rates, and shows the break-even point. As a rule of thumb, Ofgem's typical household uses 9,500 kWh of gas a year, which works out at roughly £865 of gas at today's prices including the standing charge.
What about the electricity standing charge?
It stays, for now. The electricity standing charge is the bigger of the two: 54.83p a day under the current cap, about £200 a year. The Budget says only that the government is “committing to reform electricity standing charges and will set out details next year.” Martin Lewis reports that the Chancellor will work with Ofgem on it over the next year, but that it's “trickier” and will take longer.
Electricity is harder because almost every home has a supply, so there's no group of “gas-free” households to protect, and because a lot of the network cost is driven by peak demand rather than total use. Ofgem has already been testing a partial answer: its low standing charge trial with Octopus, E.ON and EDF, which swaps a lower daily charge for a higher unit rate.
Until then the electricity standing charge is at least VAT-free: the 0% rate covers the whole electricity bill, including the daily charge, until 1 July 2027.
What it means if you're with Octopus
Octopus Energy's founder, Greg Jackson, welcomed the move in the government's announcement, saying most customers would see a cut to their gas bills. Octopus was one of the suppliers in Ofgem's low standing charge trial.
Octopus's gas standing charge is already slightly below the cap. On Flexible Octopus it averages 28.72p a day across the 14 regions, about £105 a year, against the cap's 29.68p. Its new 12- and 18-month fixes carry the same 28.72p gas standing charge. You can see the figure for your area on our Octopus prices by region page.
Because the change goes through the price cap, Flexible Octopus, which is priced in line with the cap, would pick it up when Ofgem implements it. A fix bought now keeps its standing charge for its term, but a 12- or 18-month fix taken this autumn ends around the time the change is expected anyway.
What to do this winter
The standing charge change is welcome, but it's a year or more away and worth tens of pounds either way. The January 2027 price cap starts in nine weeks and forecasts put it about 27% higher than October, roughly £460 a year more for a typical home. Ofgem confirms it on 25 November. Our January price cap guide has the latest forecasts.
- Check whether fixing makes sense. Octopus's 12M Fixed averages about £1,948 a year and the 18M about £1,888, both well below January's forecast. Our fix or variable guide runs the numbers.
- Claim what you're due. The Warm Home Discount (£150) and the new £100 Household Energy Payment don't depend on your supplier, so switching doesn't lose either.
- Know your kWh. Find your annual gas use now. It tells you whether the standing charge change helps you, and it's what every tariff comparison needs.
If you do switch, our referral link gets you £50 credit from Octopus (we get £50 too, which is how this site is funded; see how we make money). Switching takes a few minutes and your supply is never interrupted.
Sources: HM Treasury: Budget 2026 (paras 3.4–3.9, 6.24–6.25) · GOV.UK: Chancellor abolishes standing charges on gas bills · MoneySavingExpert: Gas standing charges to be scrapped · Uswitch: Gas standing charge scrapped in budget · Ofgem: Energy price cap and standing charges explained · Octopus Energy public tariff API. Figures last checked 28 October 2026.