A £100 payment for eligible households in England is due from January 2027, offering winter support as households await confirmation of the next energy price cap and forecasts diverge.
The government has budgeted £2.6 billion for the Household Energy Payment and expects up to 20 million households to qualify. Residents who pay council tax by Direct Debit should receive the money automatically; other eligible households will be invited to apply through their council. Scotland, Wales and Northern Ireland will receive funding to arrange similar help.
To qualify in England, a household must be liable for council tax on a band A-D property and live there as its main home. Second homes, empty properties and homes where the householder is not responsible for council tax are excluded. The government estimates the payment will reach 83% of fuel-stressed households and 88% of households in the bottom three income deciles.
The confirmed cap for October through December is £1,723 a year for a typical dual-fuel household paying by Direct Debit in England, Scotland and Wales. The Office of Gas and Electricity Markets (Ofgem) caps unit rates and daily standing charges on default tariffs, not a household’s total bill; actual costs depend in part on energy use. For January through March, Cornwall Insight’s Sept. 30 forecast put the annualized figure at £1,999, while E.ON Next’s forecast, updated Oct. 26, was £2,183. Both are estimates, not confirmed rates.
Ofgem linked the current cap’s increase to higher wholesale gas prices associated with the conflict in the Middle East. The House of Commons Library says the cap rose 53% in April 2022; the government then kept prices below the cap through its Energy Price Guarantee from October 2022 to June 2023.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said the payment would “barely dent” the predicted January increase. Before the Budget, Citizens Advice estimated that colder weather and expected price rises could leave average households paying £60 more per month from January through March. That is a winter spending estimate, separate from the annualized cap forecasts.
The Budget also provides £100 million for local authorities to give discretionary help to households in acute need who do not qualify for the rebate, including some living in properties above band D. It extends the 0% VAT rate on qualifying domestic electricity supplies in Great Britain until July 1, 2027; the government estimates the extension will lower the annual cap figure by about £50 in April. The package is part of the Budget’s household energy aid. To help fund its measures, the Budget also temporarily raises the Bank Corporation Tax Surcharge from 3% to 6% from Jan. 1, 2027, through March 31, 2028.
Ofgem is due to announce the January-March 2027 cap on Nov. 25.
