Autumn Budget 2026 announces Household Energy Payment, gas standing charge removal and Debt Relief Scheme

The government announced a £100 Household Energy Payment for households in council tax bands A to D in England, asked Ofgem to remove standing charges from household gas bills as early as 2027, and set out a Debt Relief Scheme for vulnerable households in energy debt, in the Autumn Budget published on 28 October 2026¹. The Department for Energy Security and Net Zero said payments will be made from January 2027¹.

The payment applies to households liable for council tax on, and living in, a property in bands A to D as their main home, including most households exempt from council tax, with full eligibility criteria to be published in due course¹. Second homes, empty properties and households where the householder is not responsible for paying council tax are not eligible¹. Up to 20 million households will be eligible, including an estimated 83% of fuel stressed households in England and 88% of households in the bottom three income deciles¹. Those paying by direct debit need do nothing, as the rebate will be paid into their bank account; others will be invited to apply by their council¹. The scheme applies in England only, with Scotland, Wales and Northern Ireland receiving additional funding to decide their own support¹. A further £100 million will go to local authorities for discretionary support to households not eligible for the £100 rebate, with councils setting their own criteria¹. Carbon Brief reported the scheme would cost £2.6bn³.

On gas standing charges, the Treasury said the fixed daily fee, which it put at £108 a year for the typical household, will be removed for around 23 million homes, with the costs recovered through the gas unit rate instead². The Treasury said this could save 60% of account-holding households around an average of £45 off their annual bill, and that targeted mitigation for a small number of households will be set out in due course². Uswitch calculated that moving the average £108.33 standing charge into unit rates would add roughly 0.94p per kWh, taking the rate from 7.97p to about 8.9p, leaving a home using 7,000 kWh a year about £40 better off and one using 14,000 kWh about £25 worse off, with a break-even point around 11,500 kWh⁴. The Daily Record reported that the government has not yet confirmed how the new unit rates would be calculated or exactly when the changes would take effect⁵. There has been no equivalent announcement on electricity standing charges, though Carbon Brief reported a commitment to reform them with details in 2027³.

"Gas standing charges are unfair and outdated so I am scrapping them to give millions of households a bit of breathing space."

The government also said it removed VAT from household electricity bills on 1 October, saving households an average of £45 a year, and is extending that cut until July 2027¹. National Energy Action said energy bills for a typical household are forecast to be £2,192 from January 2027, an increase of £915 (72%) since October 2021, and that energy debt has reached £5 billion⁶. It also said £1 billion has been reprioritised away from the Warm Homes Plan capital budget⁶. Carbon Brief reported that zero-rated VAT for energy saving materials, including solar panels, has not been extended beyond the end of March 2027³.

Why it matters for households

The £100 payment is a flat rebate by council tax band rather than by income, so it reaches many low-income homes but not all of them; National Energy Action said the payment "won't necessarily go to those in the greatest need" and called it an "inefficient sticking plaster"⁶. For gas heating, the standing charge change shifts fixed network costs into the price of each unit used. Households using little gas, including smaller homes and those with electric heating who keep a gas connection, stand to gain, while heavier gas users may pay more⁴. Because the fixed charge disappears, a home pays nothing for gas in months when it uses none, which changes the arithmetic of switching heating off or away from gas. The government said the typical household on median gas consumption will benefit¹. On energy independence, the Budget frames cheaper homegrown power as the route to lower bills, but the immediate measures are bill support and a change to how gas costs are recovered, not a reduction in the underlying cost of energy¹.

What happens next

Ofgem will consult shortly on the final design of the Debt Relief Scheme and will provide an update as soon as possible¹. The gas standing charge removal is to be delivered in 2027 or as soon as possible after, with targeted mitigation for some high-gas-use households to be set out in due course¹. Full eligibility criteria for the Household Energy Payment, including for households exempt from council tax, are to be published¹. Local authorities will publish arrangements for the discretionary fund on their websites once in place¹.

Sources6 sources

1. What the Autumn Budget 2026 means for your energy bills - GOV.UK, gov.uk
2. Chancellor abolishes standing charges on gas bills to make payments fairer - GOV.UK, gov.uk
3. UK budget 2026: Key climate and energy announcements - Carbon Brief, carbonbrief.org
4. Gas standing charge scrapped in Budget: will you be better off? - Uswitch, uswitch.com
5. Gas standing charges to be scrapped next year with households set to save £45 - Daily Record, dailyrecord.co.uk
6. Budget response: Against 72% rise in energy bills, £100 support is an 'inefficient sticking plaster' as the most vulnerable face crippling bills and sky-high debt - National Energy Action (NEA), nea.org.uk