At a glance
The short answer: the fixed charge will go, but its costs will not
The Autumn Budget 2026 says the government has asked Ofgem to abolish standing charges on domestic gas bills, aiming for delivery by the end of 2027 or as soon as possible afterwards. This is a future reform, not an immediate price cut: households should continue to follow the gas standing charge and unit rate shown on their current tariff.
Ofgem is expected to make suppliers recover the underlying costs through gas unit rates instead. That should give lower-use households more control because they would no longer pay a fixed gas charge every day, but it also means each kilowatt hour could cost more. The final rates, start date and protections for vulnerable high-use households have not yet been published.
The announcement concerns the market regulated by Ofgem in Great Britain. Northern Ireland has a separate energy market and Utility Regulator, so households there should continue to compare the gas tariffs available in their network area.
What exactly has the government announced?
A standing charge is the fixed daily part of an energy tariff. It is charged even when a household uses no gas and contributes to costs such as maintaining networks and operating the energy system. The Budget says the average gas standing charge is currently about £108 a year for a typical billpayer.
The government has asked Ofgem to abolish this fixed charge on domestic gas bills. Its detailed Budget document gives an aim of the end of 2027 or as soon as possible afterwards; a shorter government explainer describes the change as coming as early as 2027. These statements set a policy direction and target, but they do not yet create a zero-standing-charge tariff that customers can select.
Ofgem will work with suppliers and consumer groups on implementation. The Budget also says the government will set out targeted mitigation because some households use high amounts of gas that they cannot readily reduce. Until that design is published, nobody can reliably state the future unit rate or promise a particular saving.
- Confirmed: the government wants the domestic gas standing charge abolished.
- Target: delivery by the end of 2027 or as soon as possible afterwards.
- Funding: suppliers are expected to recover the costs through gas unit rates.
- Still unknown: the exact start date, unit-rate uplift and targeted protections.
- Not included: electricity standing charges, which are due to be reformed separately.
Will abolishing the gas standing charge lower your bill?
It depends on gas consumption and the final tariff design. Removing a fixed charge helps a household before it uses its first kWh. Moving those costs into the unit rate then makes the bill rise more quickly with every kWh used. The government says a significant majority should benefit from better control and that a typical household on median gas consumption will benefit, but it has not published the final customer-level rates.
Low-use homes are the most likely to gain because they avoid the full daily charge while buying fewer higher-priced units. High-use homes could pay more unless the final design or targeted mitigation offsets the increased unit cost. High use can reflect a large or inefficient property, but it can also reflect disability, health needs or circumstances that make reducing heat unsafe or impractical.
Do not compare tariffs using the standing charge alone. Our lower standing charge tariff guide explains the same principle for today’s offers: multiply the unit rate by your annual kWh, add the annual fixed charge, and compare like with like.
Worked example: how the break-even point could work
The following example is illustrative, not a forecast. Ofgem’s average capped Direct Debit gas rate for Great Britain from 1 October to 31 December 2026 is 7.97p per kWh with a 29.68p daily standing charge, including 5% VAT. Annualising that daily charge gives £108.33.
Suppose a future tariff removed the £108.33 fixed charge and, purely for illustration, added 1.08p to each kWh. Divide £108.33 by £0.0108 and the break-even point is about 10,031 kWh a year. Below that use, the example tariff costs less; above it, the example costs more.
At 6,000 kWh, the current-rate illustration is £586.53: 6,000 × 7.97p plus £108.33. The hypothetical no-standing-charge tariff at 9.05p per kWh is £543.00, or £43.53 less. At 14,000 kWh, the figures are £1,224.13 and £1,267.00 respectively, making the hypothetical tariff £42.87 more expensive.
| Annual use | 7.97p/kWh + £108.33 | Hypothetical 9.05p/kWh + £0 | Difference |
|---|---|---|---|
| 6,000 kWh | £586.53 | £543.00 | £43.53 less |
| 10,031 kWh | about £907.80 | about £907.81 | break-even |
| 14,000 kWh | £1,224.13 | £1,267.00 | £42.87 more |
Illustrative arithmetic using current average capped gas rates and an invented 1.08p uplift. It is not a prediction of the tariff Ofgem will set.
What should gas customers do now?
Keep paying and checking the tariff that applies today. The October–December 2026 average capped gas standing charge is still 29.68p a day for a Direct Debit customer in Great Britain, although the exact rate varies by region and payment method. The next price-cap period is due to be announced on 25 November 2026.
Find your annual gas use in kWh on a recent bill or online account. It is more useful for future comparisons than the monthly Direct Debit, which can include credit, debt and seasonal smoothing. Take regular meter readings and use the gas bill calculator to check a billing period against the tariff actually charged.
When new tariffs are published, compare the total cost rather than assuming “zero standing charge” means “zero fixed costs”. Check the unit rate, any exit fee, the tariff end date and whether prices can change. The fixed versus variable tariff guide gives a reusable comparison method.
- Now: use the standing charge and unit rate printed on your current tariff.
- Record: note a full year of gas use in kWh if available.
- Compare: calculate the total annual cost at each future offer.
- Watch: use Ofgem and GOV.UK updates for the final design and date.
- Get help: contact the supplier promptly if today’s bill is unaffordable.
Great Britain and Northern Ireland use different systems
Ofgem regulates the retail energy market in England, Scotland and Wales, and the Budget specifically gives Ofgem the implementation role. That means a Great Britain household should follow Ofgem’s future decisions and its supplier’s tariff notice rather than treating the Budget announcement itself as a bill change.
Northern Ireland does not use Ofgem’s price cap. Its Utility Regulator scrutinises and approves maximum tariffs for regulated gas suppliers in the Greater Belfast, West and Ten Towns areas, while the Consumer Council publishes regional comparison information. The Great Britain abolition timetable should not be assumed to change a Northern Ireland tariff.
Wherever you live, the safest comparison uses the prices actually offered for your postcode or gas network, your payment method and your own annual kWh. If the cost is already difficult to manage, use the gas-bill support guide now rather than waiting for a future reform.
What to watch before the change takes effect
The important next evidence will be Ofgem’s implementation work: how costs are moved into unit rates, how suppliers present the new tariffs, when the change begins and which customers receive mitigation. Those details will determine the real break-even point and whether a household pays more or less.
Price-cap rates will continue to change in the meantime. A tariff available in 2027 cannot be estimated safely by simply removing today’s 29.68p daily charge from today’s bill. Wholesale costs, regional charges, payment method and regulatory decisions can all change the unit rate before implementation.
For current figures, use the October 2026 gas price-cap guide and verify the rates against your own supplier statement. This page was checked against official publications on 30 October 2026 and should be read as an explainer of the announced plan, not a substitute for the final Ofgem rules.
Frequently asked questions
Has the gas standing charge already been abolished?
No. The government has asked Ofgem to abolish domestic gas standing charges, aiming for the end of 2027 or as soon as possible afterwards. Current tariff charges still apply until a formal change takes effect.
Will gas be cheaper when the standing charge ends?
Not for every household. The fixed charge is expected to move into the unit rate, so lower-use homes are more likely to save and some high-use homes could pay more. Final rates and protections have not yet been published.
Does the plan include electricity standing charges?
No. The Budget says electricity standing charges will be reformed separately, with more details to follow.
Does the gas standing charge plan apply in Northern Ireland?
The announced implementation role belongs to Ofgem, which regulates Great Britain. Northern Ireland has a separate Utility Regulator and regional gas tariffs, so households there should follow Northern Ireland announcements.
Should I switch to a zero-standing-charge tariff now?
Compare the total annual cost of any tariff available now. A zero or lower standing charge can come with a higher unit rate, so use your annual kWh and include any exit fee before deciding.
Sources
Rates and rules checked on 30 October 2026. Time-sensitive figures should be checked again before use.