Gas standing charge to be replaced by higher unit rates from 2027 or 2028

The Government plans to remove the daily standing charge on gas bills, shifting that cost into the price households pay for each unit of gas. The change is intended to help people who use little gas, including some households that have switched to electric heating, but larger homes and heavier users could pay more.

The reform is expected to take effect from October 2027 or January 2028, and will not reduce bills in time for the January price cap change. The Government estimates 60 per cent of households will save an average of £45 a year; at current rates, a household using 7,000 kWh annually could be about £40 better off. Electricity standing charges will remain, while a separate £100 payment for eligible homes in council tax bands A to D is expected to cost £2.6 billion.