Budget 2026: standing charges on gas bills will be abolished

Punitive daily standing charges on gas bills will be removed and shifted to unit price as part of ‘breathing space’ Budget

The abolition of the daily standing charges on gas bills will come into effect in 2027 although there is no confirmed start date as yet with the cost moving to the unit price instead. With the soaring cost of gas, and the energy price cap expected to rise by up to 30% in January, consumers will be hoping the change happens swiftly.

Under the standing charge system even where households radically cut usage, their bills start with an immediate deficit due to average 29.7 pence flat charge and as high as 65p in some areas of the country. A household could use no gas at all but still has to pay the standing charge of £108 a year on average.

Under the plans announced by the chancellor John Healey in the hours before his first Budget speech, he confirmed the standing charge will be transferred to the unit rate instead.

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