On Wednesday, October 28, Chancellor John Healey used his first Budget to promise £100 energy payments from January 2027 to up to 20 million households, with a temporary increase in the bank tax surcharge helping to pay for the scheme.
In England, households in council tax bands A to D will qualify. The Treasury says the payments will go straight into households' bank accounts. The £2.6 billion scheme is intended to ease pressure from energy bills during the colder months.
Scotland, Wales and Northern Ireland will receive funding for similar support. Their governments will decide how to use it. The surcharge on banks' corporation tax will rise from 3% to 6% for 15 months, from January 2027 to March 31, 2028.
That means the surcharge will double, not triple. Healey also extended the temporary cut in VAT on electricity bills until July 1, 2027. The government says this measure will lower the Ofgem price cap by about £50 in April.
He presented the package as help for households facing rising costs amid global uncertainty.