Gas standing charges scrapped for 23 million UK homes in Budget

Here's what it means for UK households

After the change takes effect, around 23 million homes will stop paying the fixed daily fee on their gas bills.

At the time of writing, regardless of how much gas is used, the charge currently adds about £108 a year to a typical household's bill.

The Treasury confirmed the move to the Evening Standard, ahead of Mr Healey's first Budget as chancellor on Wednesday.

Fixed network costs will instead move onto the unit rate customers pay for the gas they use.

The shift, as the Treasury estimates, could save three in five households an average of £45 a year.

Mr Healey has asked Ofgem to remove the charges "in 2027 or as soon as possible after."

Households are also looking for other ways to cut bills this winter.

That includes the long-running debate over whether it's cheaper to leave the heater on low all day.

In a reminder that gas bills aren't the only cost rising this year, one council has sparked anger with its own plan to hike council tax by 94%.

What the gas standing charges change means for bills

According to Prime Minister Andy Burnham, scrapping the charge was "about basic fairness and giving people more control over their bills."

Burnham added that he was "determined to reform our broken energy market, so it better serves the public interest."

Calling standing charges "unfair and outdated", Mr Healy struck a similar tone.

Healy said his Budget would "draw a line in the sand" on an energy policy that had "failed British billpayers for years."

Who could lose out from the energy bills shake-up

Not everyone stands to benefit, as some have warned that low-income households could end up worse off.

Large energy use could push their costs onto the unit rate instead of making them disappear.

The charge itself doesn't pay for gas or electricity.

It funds network upkeep, maintaining pipes and wires, and paying for upgrades.

When will gas standing charges be scrapped?

Mr Healey has asked Ofgem to remove the charge once his Budget plans take effect.

So from 2027, or as soon as possible after.

How much could households save?

Around £45 a year on average for three in five households.

That is once fixed network costs move onto the unit rate instead of a flat daily charge.