Chancellor Healey to abolish gas standing charges for 23m homes

Chancellor John Healey will abolish standing charges on gas bills for 23m homes, a measure intended to save almost two-thirds of households an average of £45 a year. The fixed daily fee, which Healey described as unfair and outdated, will be removed in 2027 or soon after, pending approval from Ofgem, the energy regulator for Great Britain.

Beyond the gas measure, Healey indicated interest in extending the removal to electricity bills. According to Martin Lewis, who met with the chancellor on budget day, Healey said he would also like to eliminate standing charges from electricity bills, though this remains subject to further discussions with Ofgem about how such a change could be implemented.

The budget also included a £100 energy payment for millions of households, with eligibility determined by council tax band. This payment formed part of a broader set of announcements that also covered tax relief for business founders, funding to tackle rough sleeping, and what Healey termed a new deal for datacentres.

The bank tax was reported to be temporary and set below 8 per cent, according to reports circulating during budget day. Additionally, Healey announced he would not proceed with a planned reduction to the Cash ISA allowance, preserving the £20,000 annual limit that savers had feared would be cut to £12,000.

Financial services professionals welcomed certain elements of the budget. Winston Ruddick, a senior financial planner at consultancy Broadstone, said that protecting the £20,000 Cash ISA allowance was welcome news for savers and would help people build tax-free savings without taking on additional risk.

The announcement on gas standing charges drew broad welcome from experts, though observers noted that a challenging winter still lay ahead for households managing energy costs.