Budget 2026: £100 energy payment for council tax bands A-D (and more) announced

The Government has unveiled its Autumn Budget, and a £100 energy payment to customers in council tax bands A-D was prominent among the energy-specific measures prioritised by Chancellor John Healey.

With wholesale energy prices and, subsequently, domestic consumer energy prices rapidly increasing due to the war in the Middle East, attention has been focused on potential government support for energy customers specifically.

What’s been announced?

There were four energy-focused announcements in the Budget.

£100 energy payment for homes in council tax bands A-D

Homes in council tax bands A, B, C and D (around 20 million) will receive a £100 payment to help with their energy bills this winter. Details on how the payment will be delivered are yet to be confirmed, but could be implemented by individual energy suppliers as a discount on bills.

Scrapping of gas standing charges

News broke earlier in the day that the government would scrap standing charges for gas in 2027. This means they will be absorbed by unit rates, which will increase as a result, so this measure will probably benefit those who use less gas more than those who have higher gas usage. The government is also looking at scrapping electricity standing charges, but this is less imminent.

Electricity VAT cut to be extended

The government cut VAT on electricity bills earlier in the year (though it only came into effect on 1 October). This was originally due to run for six months until the end of March 2027, but it will now be extended until July 2027, which Healey said would take £50 off the annual price cap.

25% off electricity bills for 10,000 businesses

Healey also announced that, through the new British Industrial Competitiveness Scheme, business electricity bills would be cut by a quarter from April for 10,000 firms “at the heart of British industry”.

Richard Neudegg, director of regulation at Uswitch.com, said: “Longer-term measures intended to make energy cheaper are important, but most households are focused on getting through this winter.

“Breathing space is what the Budget offers households this winter, but it doesn’t change what’s coming in January. A 27% increase is forecast for homes on standard energy tariffs, landing in the month they use the most gas, which could add £464 to a typical home’s annual bill."

On the £100 payment for those in council tax bands A to D, he said: “The £100 payment for households in council tax bands A to D will be well received by the 20 million who qualify and won’t be tied directly to a home’s energy bill. Critically, this will allow customers to pair the benefit of this payment with the rate protection offered by a good fixed deal before the January increase.

“It is difficult to find the perfect targeting for support for those who need it the most, and this measure will ease the financial pressure for many, alongside some of the other existing support available.

On the outcome for consumers this winter, he added: “The reality is this winter is going to be tough, with 1.7 million households planning not to turn their heating on at all.

“Budget measures will ease pressures for those who qualify. But households will also need to look at actions that will give them certainty and control. Prepare yourself for what’s ahead by locking in a fixed rate below what’s expected in January, and be highly focused on how you use energy at home."

What should you do now?

• Check which council tax band your home is in, so you know whether you qualify for the £100 payment.
• Look at your current tariff and how much of your bill is made up of standing charges. This will show how the 2027 gas change could affect you.
• Compare gas and electricity deals on Uswitch to see whether you could pay less.