By Fatma Younis
The UK government will remove standing charges from gas bills for around 23 million homes starting in 2027, Chancellor John Healey confirmed in his first Budget, though experts warn the savings will be modest and a difficult winter lies ahead.
Experts welcome move but highlight trade-offs
Cornwall Insight described the policy as "broadly progressive" and said it could help lower-income households that use less energy. Principal consultant Dr Craig Lowrey noted the change is unlikely to ease high costs this winter, with savings small compared to recent bill increases. However, shifting costs onto unit rates could make heat pumps more attractive against gas boilers for higher-use households.
Vulnerable households may face higher costs
Lowrey warned that higher unit rates mean people in poorly insulated homes, larger families, or those needing heating for health conditions could end up paying more. Some of these are the same vulnerable households the policy aims to help, making careful implementation essential.
Industry calls for social discount scheme
Energy UK chief executive Dhara Vyas welcomed the move as "good news" for many customers but stressed the need for a social discount scheme to protect low-income households with no choice but to use large amounts of gas. She said standing charges cover fixed infrastructure costs that must be recovered elsewhere, and any change creates winners and losers.
Uswitch analysis shows mixed impact
Richard Neudegg, director of regulation at Uswitch.com, said moving standing charges onto unit rates is sensible long-term. Households using less gas, such as those in smaller homes, should benefit, as will those who switched to electric heating but kept a gas connection. Based on current rates, a household using 7,000 kWh annually could be £40 better off, while one using 14,000 kWh could be £25 worse off. A typical household using 11,500 kWh would see no change.
Implementation timeline and winter outlook
The Treasury said changes will happen "in 2027 or as soon as possible after." In the meantime, consumers face a difficult winter with further price cap increases expected.
