Chancellor announces £100 energy payment for millions of households

Summarised from 5 outlets · Updated 28 Oct, 17:16 · Archive

The Chancellor has announced a £100 payment to 20 million households in council tax bands A to D in England to help with energy bills this winter.

Chancellor John Healey announced the £100 energy payment scheme in his Budget on Wednesday. The payment will reach up to 20 million households in England living in properties classified as council tax bands A to D. The scheme will cost £2.6 billion and the money will be paid directly into bank accounts from the start of January.

Alongside the £100 payment, the Chancellor announced that the VAT cut on electricity bills will be extended to July, and gas standing charges will be shifted to unit rates, with similar reforms to follow for electricity bills. Healey said the conflict in the Middle East has driven up energy bills and acknowledged this was a 'real worry' for households.

Funding will also be made available for Scotland, Wales and Northern Ireland to make similar payments, though Healey does not have the power to enforce this as council tax is a devolved matter. The announcement prompted temporary crashes of the government's online council tax band checker tool as households rushed to determine their eligibility.

The payment represents a response to rising energy costs. Ofgem's price cap rose by 3.6 per cent to £1,723 for a typical household on 1 October, with a further rise of around 22 per cent forecast for January. A typical yearly energy bill is predicted to jump by £276 in January.

Campaigners have cautiously welcomed the measures but warned they are insufficient. Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: 'The Chancellor talked the talk on energy bills, but ultimately failed to walk the walk.' He noted that wholesale gas prices have tripled since February and that the £100 payment will 'barely dent the predicted rise households face in January'. He added that because the payment is paid directly into household accounts, it may not even be spent on staying warm.

The scheme excludes households in council tax bands above D, though some people above band D may receive payments if deemed 'acutely impacted' by higher energy bills. In four local authority areas—Hull, Stoke-on-Trent, Sandwell and Barking and Dagenham in London—more than 97 per cent of households will receive the payments. In some wealthier areas, fewer than half of households are eligible.

Students living in halls will not receive the payment as student halls are not assigned council tax bands. To fund the scheme, the tax surcharge on banks' profits will be temporarily increased from 3 per cent to 6 per cent from 1 January 2027 until 31 March 2028.

How it is being reported

• Budget 2026 Interactive map: How many households in your area to receive £100 winter energy paymentThe payments will be paid to the large majority of families living in properties that are classed in council tax bands A to D — in four areas more than 97 per cent of households will receive the paymentsThe Mirror · 28 Oct, 17:11
• Will I get the £100 energy payment and when will I receive it?Here is what you need to know about the payment that millions will receive from January.BBC News · 28 Oct, 16:30
• How to check your council band and find out if you will get Labour's £100 payment for energy billsIf you are not in council tax bands A to D, you will be left out in the cold and not receive Labour's £100 payment to help with energy bills. Check your council tax band now.This is Money · 28 Oct, 16:00
• £100 winter energy payment will ‘barely dent’ increases forecast for JanuaryThe payment will reach households in council tax bands A to D at a cost of £2.6 billion.Independent Business · 28 Oct, 15:18
• How much £100 energy payment for council tax bands A-D will help vs rising billsThe Chancellor unveiled a new £100 household energy payment for millions of householdsThe i Paper · 28 Oct, 14:25

In this story: John Healey · End Fuel Poverty Coalition · Ofgem · England · Scotland · Wales · Northern Ireland

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem · Corrections log