Autumn Budget 2026: what it means for your energy bills

The main measures

The Budget on 28 October 2026 included four measures that affect household energy bills: a one-off £100 payment for many homes in England, a three-month extension to the 0% VAT rate on household electricity, a plan to remove standing charges from gas bills, and debt relief for some households in energy debt.

The government also says it aims to bring energy costs in line with Europe within 10 years through reform of the energy market. It has not published figures for what that would mean for individual bills.

The £100 Household Energy Payment

Households in England will get £100 towards energy costs if they live in, and are liable for council tax on, a property in council tax bands A to D as their main home. The government says up to 20 million households will be eligible and payments will be made from January 2027. Most households that are exempt from council tax will also be included, with full criteria to follow. Second homes, empty properties and households not responsible for council tax are not eligible.

If you pay council tax by Direct Debit, the money is paid into your bank account automatically. If you do not, your council will invite you to apply. The government warns that nobody other than your council should contact you about claiming it, so check with your council if a message looks suspicious.

Scotland, Wales and Northern Ireland will receive extra funding instead, and their governments will decide how to use it. In England, councils will also share £100 million for households outside bands A to D who need help, with each council setting its own criteria.

VAT on electricity stays at 0% until June 2027

VAT on household electricity in Great Britain has been 0% since 1 October 2026, down from 5%. It was due to return on 31 March 2027. HMRC’s VAT guidance now confirms the zero rate has been extended by three months, to 30 June 2027. Gas still carries 5% VAT.

At Ofgem’s typical use and today’s GB average cap rates, 5% VAT would add about £42.91 a year to an electricity bill. The government’s own estimate of the average saving is £45 a year. What the VAT cut saves in each region.

Gas standing charges

The government has asked Ofgem to remove standing charges from household gas bills in 2027 or as soon as possible after. The costs will move to the unit rate instead, so low gas users are the most likely to pay less and some high users may pay more. Our guide to the change explains who gains and what is still to be decided.

Help with energy debt

A Debt Relief Scheme will write off energy debt built up since the energy crisis of 2022 to 2024 for households whose bill payer gets means-tested benefits or disability benefits, or is a pensioner, provided they take steps to re-engage with paying their supplier. Ofgem will consult on the final design of the scheme. The government says it will also tackle the causes of energy debt in the longer term.

Other help and dates this winter

The £150 Warm Home Discount continues for households on means-tested benefits, with letters arriving until January 2027. Who qualifies and what to do. Ofgem will announce the price cap for January–March 2027 by 25 November 2026. The current price cap.

Frequently asked questions