UK to scrap gas bill standing charges from 2027

Standing charges on gas bills will be scrapped from next year for around 23 million homes, the Treasury has announced. The fixed daily fee currently costs a typical household about £108 per year.

Chancellor John Healey will ask regulator Ofgem to remove the charges in 2027 or as soon as possible afterwards. He will make the announcement in his first Budget in the House of Commons on Wednesday afternoon.

The Treasury said fixed costs will instead be paid through the unit rate. This change could save 60 per cent of households an average of £45 on their annual bills.

Prime Minister Andy Burnham said abolishing the charges is about basic fairness and giving people more control over their bills. He said he is determined to reform the broken energy market so it better serves the public interest.

Greg Jackson, chief executive of Octopus Energy, told BBC Breakfast that the vast majority of families will be better off. He said very large homes that use a lot of gas may end up paying a bit more.

Jackson also cited an official figure showing a 17 per cent reduction in gas consumption over the last year or two. He said people are using less gas by controlling thermostats and adjusting boiler flow temperatures.