Energy
Gas Standing Charges to Be Scrapped After Budget 2026: Should You Fix Your Energy Tariff Now?
The Autumn Budget 2026 directed Ofgem to remove gas standing charges from household bills by the end of 2027. This is a proposal — not yet in effect. What standing charges are, what the change would mean for your bill, how costs may shift to unit rates, and whether to fix or compare your tariff now.
What is a gas standing charge?
A standing charge is a fixed daily fee that every household on a gas supply pays, regardless of how much gas they use. It covers the cost of maintaining the gas network and connecting your property to it. Under Ofgem's current price cap, the gas standing charge averages 29.68p a day — around £108 a year for a typical household. You pay it whether you use your heating or not.
29.68p/day (~£108/year)
Standing charge
A fixed daily cost on every gas bill, regardless of usage. Set under Ofgem's price cap and updated quarterly. This is the charge the Budget announced will be removed.
Per kWh of gas used
Unit rate
A variable cost: the more gas you use, the more you pay. Fixed when you are on a fixed tariff; follows Ofgem's price cap on a standard variable tariff. Removing the standing charge is expected to raise unit rates to replace the lost revenue.
What did the Autumn Budget 2026 announce?
On 28 October 2026, the Chancellor announced that the government has directed Ofgem to remove the gas standing charge from domestic household bills in Great Britain by the end of 2027, or as soon as possible thereafter. The standing charge would no longer appear as a separate daily line on gas bills. The Chancellor also said he expects a similar reform for electricity standing charges to follow, though he described those as more complex and said they would take longer to implement.
Where do the standing charge costs go?
Removing the standing charge does not remove the underlying network costs. Those fixed costs will be redistributed into the per-unit (per-kWh) gas price instead. Energy suppliers must recover them somewhere, and the unit rate is where they will go. The result is a shift from a flat daily cost to a cost that scales with how much gas you use.
Lower gas usage households
If you use less gas than the typical household — a smaller home, a newer flat with better insulation, or one that relies more on electricity — you are likely to pay less overall, because you will no longer pay a standing charge on days you use little or no gas.
Higher gas usage households
If you use more gas than average — a larger older home, a family home with high hot water demand, or heavy gas heating use — the rise in unit rates may outweigh the removal of the standing charge. Your total annual bill could be higher, not lower.
The government's provisional estimate is that around 60% of households would save, with an average saving of around £45 a year for those who do. These are estimates based on assumptions about how unit rates would change — they have not been confirmed by Ofgem and the exact impact on any individual bill will not be known until Ofgem consults and sets the new rates.
Electricity standing charges
The Chancellor said he expects electricity standing charges to be reformed in a similar way, but described it as more complex and said it would take longer. No timeline for electricity has been announced.
Should you fix your energy tariff now?
The standing charge announcement does not automatically change what you should do about your tariff. The change is not in effect, and your bill is the same as it was before the Budget. The question of whether to fix — or compare what else is available — is the same question it always is: is your current deal still the best value for your usage, and when does it end?
Your fixed tariff is ending soon
If your fix ends in the next few months, this is the most important moment to compare. When a fixed tariff ends, you move to the standard variable tariff (following the price cap) unless you choose another. A new fix locks in rates before the cap next moves. When a fixed tariff ends covers the steps in the last 49 days.
Your fixed tariff has time to run
Switching before your fix ends usually costs an exit fee. Check your bill for the remaining term and the exit fee, then compare the total cost against a new tariff over the same period. Wisemium keeps your tariff end date and rates on record so you have those numbers to hand.
On a standard variable tariff
Your rates follow Ofgem's price cap, which changes every quarter. A fixed tariff may cost more or less than where the cap goes next — that comparison is worth a few minutes, whatever the Budget announced.
Exit fees
Most fixed tariffs carry an exit fee (commonly £30–£50 per fuel) if you leave before the term ends. That fee is a real cost to weigh against any saving from switching early. The energy price cap guide explains how fixed and variable tariffs compare in more detail.
How to assess your full annual energy cost
To compare tariffs properly, look at the full annual cost — not just the monthly figure or the unit rate alone. The standing charge and unit rate together determine what you actually pay.
- Your annual gas use in kWh. Shown on your bill or your online account. Ofgem's typical figure for a medium household is around 11,500 kWh of gas a year.
- The unit rate. Multiply your annual kWh by the unit rate (in pence) to get your annual fuel cost. On a fixed tariff this is locked in; on a variable tariff it moves each quarter.
- The standing charge. Multiply the daily rate by 365 and add it to your annual fuel cost for the true annual total.
- Exit fees. If your current tariff has an exit fee and you are considering switching early, add that fee to the cost of staying to the end of your term to make a fair comparison.
- Upload your bill to Wisemium. Wisemium reads your supplier, tariff name, unit rates and standing charge for you to confirm, and keeps the end date on record so you can return to it when your tariff approaches its end.
Wisemium's energy comparison is run with MyUtilityGenius and opens in a new tab. It shows tariffs available for your address and changes nothing unless you choose to switch.
Questions about gas standing charges and the Budget
Has the gas standing charge been removed?
No. On 28 October 2026 the government directed Ofgem to remove the charge by the end of 2027. It remains on your bill today and will remain until Ofgem completes its regulatory process and the change takes effect.
How much is the gas standing charge?
Under Ofgem's current price cap, the gas standing charge averages 29.68p a day — around £108 a year for a typical household. This changes each quarter when Ofgem updates the cap.
Will removing the standing charge make my bills cheaper?
It depends on how much gas you use. The costs will move into the per-unit price. Lower-usage households are likely to pay less overall; higher-usage households may pay more. Exact unit rates will not be known until Ofgem consults and confirms them.
Should I wait until 2027 to fix or compare my tariff?
The standing charge change is expected no earlier than sometime in 2027 and the timeline is not confirmed. If your tariff is ending soon, waiting has a real cost — you stay on your current rates, and the cap changes each quarter regardless of the standing charge reform.
What is the Ofgem energy price cap?
Ofgem's price cap limits the unit rate and standing charge that suppliers can charge on a standard variable tariff. It changes every quarter. It does not cap your total bill: the more gas and electricity you use, the more you pay. The energy price cap guide explains how it works.
What happens when my fixed tariff ends?
You move to the standard variable tariff at the capped rates unless you choose another tariff. The fixed tariff ending guide covers the steps in the last 49 days before your end date.
Will electricity standing charges also be removed?
The Chancellor indicated he expects a similar reform for electricity, but described it as more complex and said it would take longer. No timeline for electricity has been announced.