The plan to abolish gas standing charges: what it means for your bills, heat pumps and solar

Are gas standing charges really being abolished?

Not yet. The Budget document says the government has asked Ofgem to abolish gas standing charges on domestic bills in Great Britain and to make sure suppliers recover the fixed costs through gas unit rates, keeping the market stable, fair and competitive. The headline on the joint GOV.UK news story says the Chancellor abolishes the charges, but the Red Book describes a request to the regulator with an aim of the end of 2027 or as soon as possible after. No consultation, Ofgem decision or start date has been published, and we found no Ofgem response on 28 October 2026.

What is a gas standing charge, and what does it cost?

A standing charge is the fixed daily amount you pay to be connected, whatever you use. Ofgem's gas standing charge for 1 October to 31 December 2026 is 29.68p a day, which is £108.33 over 365 days. The Red Book gives the average as £108 a year.

Ofgem price cap rates, accessed 28 October 2026. The annual figures are the daily charge multiplied by 365. Ofgem announces the rates for 1 January 2027 by 25 November 2026.

Will my gas bill go up or down?

The fixed costs do not disappear. The plan moves them into the gas unit rate, so the daily charge goes and the price per kWh rises by an amount that has not been set. That makes the outcome depend on how much gas you use, and nobody can yet say where the dividing line falls.

The government's own estimate, in the joint GOV.UK news story rather than the Red Book, is that 60% of account-holding households could save around £45 a year on average. It comes from HM Treasury's static distributional model, with gas spend adjusted to Ofgem's October to December 2026 rates. The Red Book says only that a significant majority will benefit, and it promises a targeted mitigation for households that do not benefit, in due course, without saying what it is.

Sources: HM Treasury, Budget 2026 document (Red Book), paragraphs 3.9 and 6.24; PMO, HM Treasury and DESNZ news story, 28 October 2026. Checked 28 October 2026.

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Does it change the price cap or my January 2027 bill?

The Budget documents give no effect on the cap for 1 January 2027, which Ofgem announces by 25 November 2026. Abolition would change how the gas part of the cap is built, with the fixed charge down and the unit rate up, at a date the government and Ofgem have not set. Ofgem's cap announcements after that are due by 23 February 2027 and 26 May 2027, and the Budget documents do not tie the change to any of them. Our price cap tracker carries the confirmed cap, the dated forecasts and the Budget notes.

What does it mean for heat pump owners?

A home with no gas supply pays no gas standing charge today and has no gas unit rate to rise, so the change does not reach it. A home that keeps gas for a hob or a fire pays the standing charge today, and that charge is one of the costs being moved into the unit rate.

Our running cost guide counts the £108 a year saved by disconnecting from gas as part of the case for a heat pump. If standing charges are abolished, that saving would no longer exist as a standing charge saving, because the cost moves into a unit rate, so the comparison would rest on unit rates alone. With no start date, today's figures are the ones to decide on.

The joint release quotes the chief executive of Octopus Energy Group saying the change improves the ratio of electricity to gas prices and gives higher savings to households that move to heat pumps. That is a supplier's opinion inside the release, not a government statement, and it depends on a unit rate that has not been set. For the grant side, see our Boiler Upgrade Scheme guide: the Budget holds the scheme at £400 million in 2027-28 and does not mention any change to grant values. The government-backed Warm Homes Loan Scheme is explained on our Warm Homes Loan page; Clearline offers no credit.

Our reading of the mechanism the Budget describes, not a forecast: no gas unit rate has been published.

What does it mean for solar and battery owners?

Solar generation offsets electricity you would otherwise buy, so it does not reduce a gas standing charge or an electricity standing charge, which are paid whether a panel is on the roof or not. The announcement covers gas. For electricity the government says only that it commits to reform standing charges, with details next year and no abolition announced.

If your home heats with gas, the gas change reaches your bill in the same way as anyone else's. Solar payback still turns on your electricity unit rate and how much of your generation you use yourself: see the price cap explained, and solar payback. A battery works on electricity too, and battery storage has current package prices.

What else changed on gas bills?

The Budget scrapped the Gas Shipper Obligation, a planned new levy on gas bills; the Red Book says it will no longer be implemented. Until a Cost Control Framework is set at the 2027 spending review, no further policy costs go on bills unless they bring bills down or are essential for security of supply. Tariffs on kerosene heating oil are suspended from 26 November 2026 to 31 December 2028.

Should the plan change when you install?

The gas plan has no start date, while the zero rate of VAT on installing solar panels, batteries and heat pumps ends on 31 March 2027 and 5% applies from 1 April 2027. They are unrelated dates, and only one of them is fixed. Our VAT deadline guide covers the install date, and the Budget overview covers everything else the Budget changed.