The Budget on 28 October 2026 included several changes to household energy bills. Some arrive within weeks, while others depend on Ofgem and may not take effect until the end of 2027.
A £100 payment from January, in England
The Household Energy Payment gives £100 to households in Council Tax bands A to D in England, from January 2027. The government says up to 20 million households will be eligible, at a cost of £2.6 billion.
- If you pay council tax by direct debit and live in bands A to D, you do not need to do anything. The money goes straight into your bank account.
- If you do not pay by direct debit, your council will invite you to apply.
- Second homes and empty properties do not qualify. Full eligibility criteria are still to be published.
The government warns that nobody other than your council should contact you about claiming. Councils will also share a further £100 million to help other households in difficulty, and will set their own rules for it.
Scotland, Wales and Northern Ireland will receive funding, and their governments will decide how to provide similar support. The Warm Home Discount of £150 for eligible households carries on separately.
No VAT on electricity until July 2027
The 0% rate on household electricity in Great Britain, which began on 1 October, was due to end on 31 March 2027. It now runs for three more months, until July 2027. The Budget says this should take around £50 off the annual price cap in April 2027. Northern Ireland is expected to get extended relief from April 2027, funded through its Executive.
Gas is still charged at 5% VAT.
Gas standing charges to be abolished
The government has asked Ofgem to remove standing charges from household gas bills, aiming for the end of 2027 or as soon as possible after. They average £108 a year for a typical household.
The costs do not disappear. They will move into the price you pay per unit of gas, so people who use more gas will pay more of them. The Treasury estimates around 60% of account-holding households could save about £45 a year on average. It promises targeted help for some households, with details to follow. Plans to reform electricity standing charges are due next year.
Help with energy debt
Household energy debt has reached about £5 billion. A new strategy from the government and Ofgem includes a one-off debt relief scheme, which the Budget says will launch next year.
It is aimed at billpayers on means-tested or disability benefits, and pensioners, who have built up debt since the 2022 to 2024 energy crisis. They will need to re-engage with paying their debt to qualify. Ofgem will consult on the final design.
Other energy decisions
- A planned levy on gas bills to fund hydrogen, the Gas Shipper Obligation, has been dropped. The government will pay for those projects instead.
- The 5p fuel duty cut and freeze now runs to 1 July 2027.
- The Boiler Upgrade Scheme will get £400 million in 2027-28, while £1 billion of capital grant is saved from the wider Warm Homes Plan.
- Great British Energy loses £200 million but keeps £8.3 billion across the spending review period, a figure that also covers GBE-N.
What happens next
None of this sets the price cap itself. Ofgem will announce the level for January to March 2027 on 25 November 2026. You can follow the rates in our energy price cap tracker.