Britain's new budget offers £100 energy payment to 20 million households
Editorial illustration — Press Pass USABritain will pay a one-off £100 energy payment to about 20 million households this winter, Chancellor John Healey announced Wednesday in his first budget, a £2.6 billion measure aimed at softening sharply rising energy bills.
The Household Energy Payment will go automatically to homes in council tax bands A to D in England, paid directly into the bank account normally used to pay council tax, with payments due to start arriving from the beginning of January. For most recipients there will be no form to fill in; households that do not pay by direct debit will be invited by their council to apply. Scotland, Wales and Northern Ireland will receive their share of the funding, with their governments deciding how to provide similar help.
Healey also said gas standing charges will be scrapped, with the daily charge folded into the unit price — a change the Treasury says will save about 60% of households around £45 a year — and extended the temporary cut in value-added tax on electricity to July 2027. He kept the freeze on fuel duty rates until at least July, at a cost of £1.4 billion. Britain's regulated domestic energy price cap rose 4% in October, and some forecasts had predicted a rise of around 20% to more than £2,000 a year in January without the new measures.
To help fund the cost-of-living package, Healey said he would raise taxes on banks, gambling, savers and landlords and tighten value-added tax rules for online marketplaces. He warned of the impact of the conflict in the Gulf, which has driven up oil and gas prices, as well as trade tensions and the war in Ukraine. “Those are the storms we face. We can't wish them away. We must choose the course we steer through them,” he told Parliament. The Office for Budget Responsibility raised its inflation forecasts to 3.1% for 2026 and 3.4% for 2027.
Sources: Reuters (Oct 28, 2026); BBC News (Oct 28, 2026).
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