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.
In short
- Gas standing charges are due to be removed by 2027 or early 2028.
- The cost will move into the per-unit gas price.
- Low-use households may save, while larger users could pay more.
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The case for
Removing the gas standing charge could make bills fairer for households that use little gas, including people who have invested in electric heating but still need a gas connection. Moving the cost into unit rates means charges track consumption more closely, and the Government estimates that most households would save, potentially easing pressure on those who use less.
The case against
Shifting the charge into unit rates could raise costs for larger homes and households that rely heavily on gas, including those with limited ability to improve insulation or change their heating. Critics may also question whether delaying the change until 2027 or 2028 offers timely relief, and whether targeted support would be a fairer use of public money than a broad redesign that leaves electricity standing charges in place.
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Originally published by Daily Mail as “Government scraps standing charges on gas bills – what will it mean for your energy bills?”.