Copy article

Newspage Raw

Standing charges to be scrapped from household gas bills

ended 28. October 2026

Standing charges will be removed from household gas bills for tens of millions of people, the chancellor has announced.

Instead, fixed costs will be paid on the unit rate, with the government estimating that 60% of households will save an average of £45 per year.

Standing charges are fixed daily fees applied separately to gas and electricity bills, which customers pay regardless of usage.

Questions for Newspagers

  1. Is this a positive measure?
  2. Is it a sticking plaster on a broken bone?
  3. What needs to be done in the Budget for cost of living?

5 responses from the Newspage community

Copy all

Star Quote
Copy

Pro
Graham NicollVerified
Financial Planner, Chartered FCSI at NCL Wealth Partners
iContact details are shown to logged-in members. Log in
Standing charges help energy networks to generate stable income that underpins long term investment plans, to offer lower unit rates for energy and share costs across all customers, selecting the fixed cost associated with the service.

However they are arguably unfair on lower energy users, meaning that if you reduce your energy usage, your often still have high energy bills. They have a disproportionate impact on smaller houses, single owner / occupiers and individuals on lower incomes who try and reduce their energy usage. They also penalise empty properties, including second homes, although I am not sure many people would be sympathetic of this!

Reducing the fixed charge would be sensible, although removing all together does not feel like the sensible thing to do. But, if you reduce the standing charge, the unit costs will have to go up, which will impact higher energy users, possibly even have an unintended consequence for businesses.
Copy

Pro
Harry GoodliffeVerified
Director at HTG Mortgages
iContact details are shown to logged-in members. Log in
A £45 saving is 86p a week, and 4 in 10 households won’t even get that. Fixed costs don’t vanish when you remove a standing charge; they get pushed onto the unit rate, so the same money is collected from whoever uses the most gas. That’s big families, old drafty houses and people who can’t afford to insulate. The real squeeze is tax, with five years of frozen thresholds dragging ordinary pay into higher bands. If the Budget doesn’t give that back, expect nobody to notice 86p a week.
Copy

Pro
Rupert CollingwoodVerified
Founder at The London Broker
iContact details are shown to logged-in members. Log in
Clearly every little helps, but £45 a year or £3.75 a month is unlikely to create any meaningful “breathing space” for families coping with petrol and diesel prices heading towards £2 per litre.
Ministers need to start getting serious about tackling growth, unemployment, inflation and the cost of living. These measures, gifted to the public under the banner of “breathing space” increasingly demonstrate how out of touch with ordinary hard working families this government appears to be.
Copy

Pro
Tony RedondoVerified
Founder at Cosmos Currency Exchange
iContact details are shown to logged-in members. Log in
Scrapping gas standing charges offers minor relief for low-volume users but shifting fixed costs onto unit rates simply taxes higher-usage households, such as families and the elderly, to cover the gap. It’s revenue-neutral for suppliers and does nothing to cut aggregate energy costs. A textbook sticking plaster on a broken bone. The UK sits on some of Europe’s largest oil and gas reserves yet endures some of the highest energy prices in the G7. That’s what happens when decarbonisation targets are allowed to override basic economics. Tying electricity prices to marginal gas, under-investing in storage and loading bills with green levies has badly damaged our energy security. The Budget needs real structural reform: decouple electricity from gas pricing, move policy levies into general taxation, accelerate home insulation and make pragmatic use of the North Sea.
Copy

Pro
Tony SanchezVerified
Founder at Bridging Loan Directory
iContact details are shown to logged-in members. Log in
Paying a daily charge before you’ve used any gas is frustrating, so I can see the appeal. But moving those costs into the unit rate doesn’t make them disappear. The important question is who ends up paying more, particularly households that need more heating.

An average £45 annual saving for those who benefit is welcome, but it won’t make a huge difference to a household struggling with its bills. The Budget needs to be judged on what happens to the total cost of living, rather than whether one charge disappears from the bill.