Gas Standing Charge Removal 2027: Who Saves £45?

Last updated: Sunday 1 November 2026

The gas standing charge, worth about £108 a year on a typical bill, is being scrapped, with Ofgem asked to deliver it in 2027 or as soon as possible after. The cost does not vanish: it moves onto the price of each unit of gas. The Government says about 60% of households with a gas account should save around £45 a year on average, with low gas users gaining most and high users likely to pay more. Until the change arrives, the gas standing charge under the price cap is 29.68p a day, as listed on 1 November 2026. This SwitchSquid guide shows who saves and who pays, with worked examples by usage, and what it means if you are thinking about fixing. If you compare through the buttons on this page, we may earn a commission, and it does not change the price you pay.

Sources: GOV.UK: Chancellor abolishes standing charges on gas bills, GOV.UK: what the Autumn Budget 2026 means for your energy bills, Ofgem price cap rates and Ofgem typical consumption values, as listed on 1 November 2026.

What has been announced

On 28 October 2026 the Chancellor announced that standing charges on gas bills will be abolished. The key points from GOV.UK are:

• The gas standing charge adds around £108 a year to a typical household bill, and around 23 million homes pay it.

• Ofgem will deliver the change in 2027 or as soon as possible after that.

• The costs behind the charge will be recovered through the unit rate instead, so what you pay depends more on how much gas you use.

• Around 60% of households with a gas account could save about £45 a year on average.

• Targeted help for households who would otherwise pay more is promised “in due course”.

The announcement covers gas only. The electricity standing charge stays, at 54.83p a day under the price cap from 1 October to 31 December 2026, as listed on 1 November 2026. For the news itself and the latest gas rates, see our gas standing charge 2026 page. This guide focuses on what the change means for different homes.

Why moving the cost to the unit rate creates winners and losers

A standing charge is a fixed daily amount that every household pays, whether it uses a little gas or a lot. Take it away and spread the same costs across every kilowatt hour, and low users pay less while high users pay more. Our standing charges vs unit rates guide explains how the two parts of a bill fit together.

GOV.UK says households using the median amount of gas benefit, and those with the lowest use benefit most. That fits with the 60% figure: a smaller number of very high users are likely to pull average use above what the median household uses.

Who saves and who pays: worked examples

To show the scale, SwitchSquid has worked through a simple illustration. It assumes the £108.33 a year standing charge (29.68p a day) is spread evenly across the typical gas use of 9,500kWh a year. That adds about 1.14p to each kWh. This is our own illustration, not the Government’s method, and Ofgem will set the real figures. The Treasury’s analysis uses its Distributional Analysis Model with household spending data, so actual results will differ.

Ofgem’s typical values are 9,500kWh of gas and 2,500kWh of electricity a year, used to work out the £1,723 price cap figure for October to December 2026. Your own annual use is on your bill or in your supplier app.

Who is most likely to gain

• People in flats and smaller homes with modest heating needs.

• Homes that mostly use gas for cooking or hot water, with little heating demand.

• Households that have cut their gas use through insulation, a newer boiler or a heat pump hybrid set-up.

• Second homes and empty properties with a gas supply but little use, which pay the standing charge every day at the moment.

Who could pay more

• Larger and older homes that need a lot of heating.

• Households at home all day, including some older people, carers and families with young children.

• People with health conditions who need to keep the house warmer.

Some of these groups are also the households most likely to struggle with bills, which is why the Government has promised targeted support. Details have not been published. If you get the Warm Home Discount, that £150 payment is a separate scheme from the standing charge change.

When will gas standing charges go?

GOV.UK says Ofgem will deliver the change in 2027 or as soon as possible after. Ofgem updates the price cap every three months, from 1 January, 1 April, 1 July and 1 October. A change of this size would normally be set out in advance and land at one of those quarterly dates. Our energy price cap change dates for 2027 calendar sets out each one. Our guide to who sets the energy price cap explains how Ofgem makes these decisions, and when the next price cap announcement is due lists the announcement dates.

The same Budget package also kept VAT on household electricity in Great Britain at 0% until 30 June 2027 (it stays at 5% in Northern Ireland, and gas stays at 5%), and confirmed a £100 Household Energy Payment for Council Tax bands A to D in England from January 2027.

Should you fix your energy tariff because of this?

A fixed tariff locks in the unit rates and standing charges set out in your contract. How a fixed deal handles the gas standing charge removal will depend on your supplier and your contract terms, so read the terms before you sign and ask the supplier if it is not clear. Price cap rules apply to standard variable tariffs and default tariffs, not fixed deals.

The bigger question is still whether a fix beats the cap for your usage. A low gas user who stays on the price cap should see the full effect of the change when it arrives. A high user might prefer the certainty of a fix. Gas-only households can check our cheapest gas only deals guide.

Fit summary

• You probably gain if: you use less than about 9,500kWh of gas a year.

• You may pay more if: you use well over 9,500kWh, for example in a large or older house.

• Little changes if: your gas use is close to the typical figure.

• Act now on tariffs if: a fixed deal beats the price cap for your usage, whatever happens to the standing charge.

Want to see where your home sits? Ask Squid AI, SwitchSquid’s assistant, to run your annual gas use through the example.

Important conditions

• The change is planned for 2027 or as soon as possible after, and Ofgem will set the detail.

• The £45 average saving is the Government’s estimate for about 60% of households with a gas account.

• The worked examples are SwitchSquid’s illustration using Ofgem’s price cap rates and typical values, as listed on 1 November 2026.

• Only the gas standing charge is affected. The electricity standing charge stays.

• Targeted support for households who would pay more has been promised, but details are not yet published.

Final decision card

Scrapping the gas standing charge moves about £108 a year onto the unit rate. Low and median gas users should save, with around £45 a year on average for 60% of households, while high users could pay more. Main limitation: the start date and exact rates are still to be set by Ofgem. In the meantime, compare tariffs on your actual usage rather than waiting for the change.

FAQ

When will the gas standing charge be removed?

GOV.UK says Ofgem will deliver the change in 2027 or as soon as possible after. Price cap changes usually take effect on 1 January, 1 April, 1 July or 1 October. Ofgem has not yet named the date.

How much is the gas standing charge?

Under the price cap from 1 October to 31 December 2026 it is 29.68p a day, as listed on 1 November 2026. That is about £108 a year. Rates vary slightly by region and payment method.

Will I save £45 a year?

The Government says around 60% of households with a gas account could save about £45 a year on average. Low users could save more and high users could pay more. Your result depends on how much gas you use.

Is the electricity standing charge being scrapped too?

No. The announcement covers gas only. The electricity standing charge stays at 54.83p a day under the price cap for October to December 2026.

Why would some people pay more?

The costs behind the standing charge are being moved onto the unit rate. Households that use a lot of gas will pay that higher unit rate on more kilowatt hours. The Government has promised targeted support for those affected.

Does this affect fixed energy deals?

It depends on your supplier and contract terms. The price cap covers standard variable and default tariffs, not fixed deals. Check your terms and ask your supplier how the change will be handled.

How do I find my annual gas use?

Your annual gas use in kWh is on your energy bill or in your supplier’s app. Compare it with Ofgem’s typical figure of 9,500kWh to see whether you are likely to gain or pay more.