By Islam El-Sakka
Around 20 million households in England will receive a £100 payment in January 2027 to help with rising energy costs, Chancellor John Healey announced in his Budget on Wednesday. The measure is part of a broader cost-of-living package that also extends a VAT cut on electricity bills and raises the minimum wage by 3.9 per cent for 2.3 million workers.
How the payment will be delivered
Local councils will deposit the £100 directly into the bank accounts of council tax payers in bands A to D. Households that pay by direct debit will receive the money automatically, while those using other payment methods will need to provide bank details to their local authority.
Impact against rising energy bills
The payment arrives as the energy price cap is forecast to increase by more than 25 per cent in January, pushing the typical annual bill up by £276, according to Cornwall Insights. The £100 support will therefore cover only a portion of the expected increase.
Eligibility criteria
Only residents in properties valued in council tax bands A to D qualify. The banding system, last fully updated in 1991, has been criticized for not reflecting recent property price inflation, potentially including some high-value homes in band D, particularly in London.
Students and non-council-tax payers
Students living in halls of residence are excluded because such accommodation falls outside bands A to D. However, students renting private properties within those bands will be eligible, though local authorities must devise a distribution method since they do not pay council tax. Other residents exempt from council tax but living in qualifying bands will also receive the payment, with details still to be confirmed.
Use of the funds
The money will be paid into bank accounts without restrictions; recipients are not required to spend it on energy bills.
Devolved nations
Funding will be provided to Wales, Scotland and Northern Ireland to implement similar schemes. The Welsh government has confirmed it will mirror the English payment. The Scottish government is considering replication, while Northern Ireland would need to approve the measure in its own budget.
