UK Government announces £100 energy payment for households

The UK Labour government has introduced a new energy support package as part of its economic plan to reduce household bills and support British industry. Under the new measures, approximately 80% of households in England within council tax bands A through D will receive a £100 Household Energy Payment directly into their bank accounts starting in January. This initiative is supported by £2.6 billion in funding, with devolved nations receiving support via the Barnett formula.

Additional measures include extending the VAT cut on electricity until July 2027, abolishing standing charges on gas bills, and scrapping the hydrogen levy. To fund these reforms, the government will temporarily increase the Bank Corporation Tax Surcharge from 3% to 6% between January 2027 and March 2028.

Critics have raised concerns regarding the targeting of the relief. An analysis of council tax data suggests that because the payments are tied to outdated property tax bands, the handout may disproportionately benefit wealthy residents in areas like Notting Hill and Twickenham, while missing less affluent households in deindustrialized regions such as Blackpool.