In yesterday’s budget, Chancellor John Healey announced quite a few different policies and policy adjustments for energy. But what does this mean for people’s pockets?
Household Energy Payment
The Household Energy Payment will provide a £100 payment to households in Council Tax bands A to D in England (including those exempt from council tax), to help with their energy costs.
Check your council tax band here.
Up to 20 million households will be eligible and payments will be made from January 2027.
People who pay council tax by direct debit will receive the rebate directly into their bank account. Councils will contact those who don’t and invite them to apply.
However, second homes and empty properties won’t be eligible and Labour says Northern Ireland, Scotland and Wales will receive additional funding.
The government says it is helping those who aren’t eligible with an additional £100 million for local authorities to provide discretionary support.
Standing charges
Standing charges are fixed costs in energy bills that don’t change no matter how much energy a household uses.
The government has asked Ofgem to remove this from gas bills in 2027 or as early as possible.
Labour claim the typical household on median gas consumption will benefit from this change. Some high-gas-use households could benefit from targeted mitigation soon.
Energy debt circuit breaker
In the short term, the government have vowed to provide targeted, one-off debt relief for vulnerable households.
If the household’s energy billpayer is on means-tested benefits, disability benefits or is a pensioner and the home has built up debt since the energy crisis of 2022-2024, that household will be eligible to have its debt written off through the Debt Relief Scheme.
Electricity VAT cuts
The government has said it will extend the VAT cut on electricity bills until July 2027. The removal of VAT was originally announced on the 1st October and is said to save households £45 per year.
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