What has the government announced about gas standing charges?
Budget 2026, published on 28 October, says the government has asked Ofgem to abolish domestic gas standing charges in Great Britain. The target is delivery by the end of 2027, or as soon as possible afterwards. It is not a guaranteed January 2027 start date.
The Budget says suppliers will recover those costs through gas unit rates instead. The daily fee would disappear, but the underlying costs would still be paid through the price of each kWh. The government also plans targeted mitigation; full details are still to come.
Will electricity standing charges also be removed?
There is no confirmed commitment to abolish electricity standing charges. The same Budget commits to reforming them and says details will be announced in 2027. Reform could change the way charges work, but the announcement does not specify a zero daily charge or an electricity implementation date.
For a household with both fuels, treat the gas and electricity announcements separately. For an all-electric home, the gas measure does not itself remove any charge from the electricity bill. Wait for the electricity proposals before budgeting for a saving.
What standing charges are households paying now?
A standing charge is a daily fee alongside the charge for energy used. Ofgem’s published Great Britain averages for Direct Debit customers under the October to December 2026 price cap are 54.83p a day for electricity and 29.68p a day for gas. Actual rates depend on region, payment method and tariff.
Multiplying those daily figures by 365 gives roughly £200 for electricity and £108 for gas. These are annualised illustrations of the current quarter’s rates, not a promise that prices will stay the same for a year. They are also not the savings every household would receive if a charge disappeared.
The announced gas reform applies to Great Britain: England, Scotland and Wales. Do not assume it changes Northern Ireland tariffs. Check the rates and arrangements for your own supply.
Does removing a standing charge always mean a cheaper bill?
No. If the daily fee falls while the unit rate rises, the result depends on consumption. To see why, imagine two simplified tariffs with all other terms identical: tariff A charges 30p a day plus 8p per kWh; tariff B charges no daily fee plus 9p per kWh. These are invented figures, not proposed gas prices or available offers.
Over 365 days, tariff A has £109.50 of standing charges. Tariff B costs an extra 1p for every kWh. At 5,000 kWh, A totals £509.50 and B totals £450, a £59.50 saving. At 15,000 kWh, A totals £1,309.50 and B totals £1,350, a £40.50 increase.
In this example the tariffs break even at 10,950 kWh: £109.50 divided by £0.01 per kWh. Your own result would need the actual future rates. A household cannot calculate its saving simply by subtracting today’s standing charge from the annual bill.
What should you do when checking an electricity bill?
Keep checking the tariff you actually have. For a single-rate electricity tariff, multiply kWh used by the unit price, then add the daily standing charge multiplied by the number of days. Keep all prices in the same currency units and check whether tax is already included.
If comparing a lower-standing-charge offer, use the same consumption and dates for both quotes. A daily fee is only one part of the comparison; include the unit rate and any applicable exit fee. Existing low-charge offers are separate from a future nationwide policy change.
- Use actual readings or a reliable annual kWh figure rather than the monthly Direct Debit amount.
- Record both the pence-per-kWh rate and the pence-per-day charge.
- Treat any future saving as unconfirmed until the new rates and start date are known.
Gas and electricity standing charge FAQs
Have gas standing charges already been scrapped?
No. Removal is planned, with a target of the end of 2027 or as soon as possible afterwards. Keep using your current tariff until a change takes effect.
Is there a date for abolishing electricity standing charges?
No. As of 30 October 2026, the government has promised electricity standing charge reform with details in 2027. It has not confirmed abolition or a start date.
Will I save the full annual gas standing charge?
Not necessarily. Costs are due to move into gas unit rates, so any saving depends on the eventual rates, your usage and any support that applies.
Estimate your electricity bill
Use your current electricity unit rate and daily standing charge when checking a bill. Do not enter a zero standing charge because of the gas announcement. Compare alternative electricity tariffs over the same period and with the same kWh use.
Sources
The policy, timetable and current published tariff figures were checked against these official sources on 30 October 2026. The worked comparison below uses invented rates to explain the arithmetic, not a forecast: