The gas standing charge scrapped: the short version
Getting the gas standing charge scrapped has been a campaign aim for years, and the Autumn Budget delivered it. The Chancellor asked Ofgem to take the charge off household gas bills: the 29.68p a day every gas customer pays before burning a single unit, or about £108 a year.1
Those costs do not disappear with the charge, because they move into the price of gas instead. Spread over the use at which the change breaks even, that lifts the average gas unit rate by about 0.91p, from 7.97p to roughly 8.88p, a rise of around 11%. The gas unit rate increase is what pays for the saving.
- Low users gain most. A flat burning 4,000 kWh of gas is about £72 a year better off, and a day with no gas use costs nothing at all.
- Heavy users fund it. Above about 11,900 kWh a year the same bill rises instead, by roughly £92 at 22,000 kWh.
- Nothing changes this winter. Ofgem has to rewrite the price cap first, and the Treasury is aiming for 2027 at the earliest.
The Budget 2026 standing charge decision
Chancellor John Healey confirmed the change on 28 October 2026. The Treasury has asked Ofgem to remove gas standing charge costs from bills in England, Scotland and Wales in 2027, or as soon as possible after, and estimates that 60% of households with a gas account would save an average of £45 a year across about 23 million homes.123
The detail is not settled. Ofgem has to rewrite the price cap, the promised support for homes that lose out is unpublished, and no date is fixed. Electricity standing charges stay as they are, with reform proposals promised next year.3
- February 2025Ofgem consults on a price cap variant with a zero standing charge tariff inside it4
- June 2026The Ofgem standing charge pilot begins with EDF, E.ON, Octopus and British Gas5
- 21 October 2026Prime Minister Andy Burnham asks ministers to look at removing the charge6
- 28 October 2026The Budget asks Ofgem to remove it in 2027, or as soon as possible after
- By 25 November 2026Ofgem is due to announce the January 2027 cap, which will still include the charge
What does the gas standing charge pay for?
The October cap sets the average gas standing charge at 29.68p a day for Direct Debit customers, from 29.16p in Southern England to 30.20p in London.8 It rose by 0.64p in October, mainly because Ofgem raised its allowance for supplier operating costs.
On electricity, network charges make up most of the standing charge. The gas standing charge contains none of them, because gas pipe costs already sit in the unit rate.9 That is why gas is the easier of the two to move, and why Ofgem already pushes part of those fixed costs into the unit rate.10 The electricity side is covered in the SwitchInsights guide to the 2026 standing charge increase.
Who wins and who pays
Two savings figures are circulating and they measure different things. The Treasury's £45 is an average across the 60% of gas households it expects to gain, whereas the Nesta gas standing charge modelling puts the saving for a typical home burning 9,500 kWh at £22, with 63% of dual fuel homes better off.11 Both agree on the shape, and Nesta's crossover of around 12,000 kWh is close to the 11,900 the SwitchInsights arithmetic gives.
The gain leans towards lower incomes, since Nesta finds 84% of households earning under £15,000 would be better off against 21% of those on £150,000 or more.11 The homes that lose are not all wealthy ones, though, and Citizens Advice has warned that vulnerable low-income households with high gas use could be penalised.12 That is the gap the Treasury's promised support has to fill.
For a supplier the standing charge is the steady part of the bill, arriving every day from every customer whatever the weather. Recovering it per unit swaps that certainty for volume risk on costs Ofgem itself calls largely fixed, so a mild winter means less of them recovered and no way to claw it back.10 Nesta accepts a small risk premium may follow, which would land on every unit of gas.11
A low standing charge gas tariff already exists
Fuse Energy has sold a version of this policy for months. On 28 October its tracker charged 17.25p a day for gas against the capped 29.68p, worth £45 a year, and priced the gas unit rate at 8.12p, above the cap's 7.97p.14 Its September 2026 18-month fix went further, at 8.75p a day with a unit rate of 8.25p, and the SwitchInsights analysis of that fix found its saving ran out before reaching a typical home's gas use.13
That is the policy in miniature, and it behaves the same way: the low charge is worth about £31 a year to a home using 9,500 kWh of gas and about £12 to one using 22,000, because the unit rate claws the rest back.
What to do now
Nesta expects full implementation to take at least a year.11 In the meantime the market sells both halves of the trade, and which half suits a household depends on how much gas it burns.
| Tracker | Where the discount sits | 9,500 kWh | 17,000 kWh | 22,000 kWh |
|---|---|---|---|---|
| Fuse Energy Single Rate Tracker | Standing charge 12.43p lower, unit rate 0.15p above the cap | £31 | £20 | £12 |
| EDF Simply Tracker | Standing charge 6.74p lower, unit rate a shade under the cap | £30 | £34 | £37 |
| ScottishPower Cap Tracker | Standing charge 1.95p lower, unit rate a shade under the cap | £12 | £16 | £19 |
The two discounts split cleanly, because Fuse cuts the standing charge hardest, so its saving shrinks as use rises, whereas EDF's Simply Tracker takes less off the charge but holds its unit rate a shade under the cap, so its saving grows instead. The crossover sits at about 10,100 kWh of gas a year, below which Fuse saves more and above which EDF does.14
A low standing charge is not automatically good, nor a high one automatically bad. So Energy's So Narwhal 24-month fix charges 30.21p a day for gas, above the cap, and pairs it with a gas unit rate 1.87p above the cap as well, which costs a heavy user on both lines at once.
The gas tracker that improves the more you burn
EDF's Simply Tracker takes 6.74p a day off the gas standing charge and still holds its gas unit rate a shade under the cap, which is more than three times the standing charge discount of the only other cap tracker in the SwitchPilot feed managing both. It is the opposite shape to the policy, so a home heating on gas could keep more of the saving the colder the winter gets.
*We earn a commission if you switch through our EDF links, at no cost to you, and it does not change what we publish. EDF's tracker is second on the table above at 9,500 kWh, behind Fuse Energy, which pays us nothing. The same disclosure covers the EDF link in the FAQ below.
See EDF Simply Tracker →How SwitchInsights measured this: cap rates are Ofgem's published Q4 2026 price cap, and tariff rates come from the SwitchPilot daily rate feed, taken as a median across the regions each tariff returned on 28 October 2026 and priced on Ofgem's current typical gas use of 9,500 kWh. Savings are gas only, Direct Debit and scored against the cap, based on tariff rates rather than advertised discounts, and a supplier with no priced tariff in the feed is reported missing rather than filled in. Nesta's £22 and the Treasury's £45 are their figures, not SwitchInsights', and the point of printing both is that they measure different things.
This article is not financial advice. Compare deals on the SwitchPilot Tariff Tracker, which scores them on quality as well as price.