Chancellor John Healey announces £100 energy payment for 20 million UK households
The Autumn Budget will see a direct £100 rebate for 20 million households in council tax bands A‑D, funded by a £2.6 bn scheme and paired with an extended VAT cut on electricity.
By Felo News Desk · Published
Chancellor John Healey used the Autumn Budget on 28 October 2026 to unveil a £100 direct rebate for around 20 million UK households in council tax bands A to D, a scheme costing £2.6 bn.
What happened
The payment will be credited automatically to eligible households' bank accounts this winter, aiming to ease energy‑bill pressure through the coldest months and into spring. Only properties in council tax bands A, B, C or D qualify, according to the chancellor’s statements.
What the reports add
Independent UK reported that the rebate will be funded by a £2.6 bn Household Energy Payment, while a separate Independent bulletin added that the measure is paired with an extension of the VAT reduction on electricity – cutting £50 off the annual price cap and running through winter, spring and into July.
What was said
Healey told the House of Commons, “I am taking one further step. This winter, for 20 million households in council tax bands A to D, I am announcing a £100 energy payment for households, paid directly into people’s bank accounts to deal with rising energy bills.” (Independent, 28 Oct 2026)
He also said the VAT cut on electricity, introduced earlier by Prime Minister Andy Burnham, would be extended, adding “£50 off the annual price cap” for the same period. (Independent, 28 Oct 2026)
How it came about
The payment follows Healey’s broader fiscal plan outlined in earlier Felo coverage, including his pledge to cut standing charges on gas supplies (Healey to cut household gas standing charges by up to £50 in Budget) and his commitment to expand the Warm Home Discount (Chancellor John Healey to Deliver 2026 Budget). The scheme is presented as a response to rising energy costs linked to global uncertainties, including the conflict in the Middle East and higher oil and gas prices.
Key facts
- Around 20 million UK households in council tax bands A‑D will receive a £100 energy rebate. (independent.co.uk)
- The scheme will cost the government £2.6 bn. (independent.co.uk)
- Payments will be made directly into bank accounts during the winter months. (independent.co.uk)
- Healey extended the VAT cut on electricity, reducing the annual price cap by £50. (independent.co.uk)
Timeline
- 2026-10-26 — Healey scheduled to deliver the Autumn Budget.
- 2026-10-27 — Healey announced plans to cut household gas standing charges.
- 2026-10-28 — Budget speech introduced £100 energy payment and VAT extension.
