London, UK - The research and innovation foundation Nesta has responded to the Prime Minister announcing that the UK government is considering abolishing the standing charge on gas bills.

Nesta proposed abolishing the gas standing charge, finding that doing so would save the typical dual fuel household £27 per year, while costing the Treasury nothing.

Nesta estimates that 86% of the poorest households would be better off with the gas standing charge abolished, compared with only 24% of the wealthiest.

Madeleine Gabriel, director of sustainable future at Nesta, said: “Abolishing the gas standing charge and moving those costs onto the unit rate would help those worst hit by rising energy prices. This is because the gas standing charge currently takes up a bigger chunk of the bills that lower income households have to pay.

“Alongside this, taking action on gas prices would show real leadership on decarbonisation, by making it easier for people to switch to low carbon technologies like heat pumps and electric vehicles. At a time when everyone’s energy bills are being pushed up by an energy crisis caused by importing gas, the majority of consumers will see their bills come down if the gas standing charge is abolished. Alongside other measures, like taking the remaining levies off electricity bills, this could be a huge boost to the heat pump industry when it most needs support to grow.”

Nesta outlined abolishing the gas standing charge and removing levies from electricity bills as two of its four steps the UK government could take at the Budget and over this winter to address high energy bills caused by the Iran war.

Notes to editors

1. Nesta’s analysis of the impact on energy bills of abolishing the gas standing charge and moving costs into the unit rate is based on historical price cap data from Ofgem and Cornwall Insight’s forecast for the energy price cap in January 2027 (the earliest this change could realistically be implemented).
2. For more information on the analysis or to speak to one of the experts involved, please contact the Nesta press office on 07942 499048, or [email protected]. Spokespeople are available for broadcast interviews.