Autumn Budget 2026: Energy bill changes explained
With energy bills still high, many households are wondering if the Autumn Budget will make things more managable. The Chancellor announced a few changes to help with energy costs. These include a £100 payment for some households, a cut to electricity VAT and plans to remove gas standing charges.
But what do these changes mean for you?
We’ve broken down the key announcements, explained how they could affect your energy bills and looked at what more needs to happen to make energy affordable for the long term.
How will the Budget impact home energy costs?
Here are four key changes that could affect the cost of energy at home:
1. £100 winter energy payment: which households can get this?
The government has announced a £100 payment for households in council tax bands A to D in England, expected to start from January 2027.
If you’re eligible, and pay by Direct Debit, you’ll get a one-off payment straight into your bank account to help with the cost of living over the winter period.
If you don’t pay by direct debit, your council will invite you to apply for the rebate directly.
2. You won’t need to pay electricity VAT
The temporary VAT cut on electricity will be extended by three months to 1 July 2027. This means you won’t pay any VAT for your electricity bill.
This represents a further extension to the measure that came into effect on 1st October 2026.
3. The Warm Homes Loan Scheme will solar panels and heat pumps more accessible
For people looking to generate their own electricity or make their homes more energy efficient, the upfront cost can be a barrier.
The Warm Homes Loan Scheme is designed to make these technologies more accessible, by reducing the interest percentage you need to pay back each month on finance payments. This could help more households make these improvements and benefit from cleaner energy at home.
4. Gas standing charges could be removed from your energy bill in the future
A standing charge is a fixed cost per day that doesn’t change, no matter how much or little energy you use.
The government has asked Ofgem, the energy regulator for Great Britain, to remove gas standing charges ‘by the end of 2027 at the latest.’
However, these costs will likely still be recovered via your unit rate, which is the amount you pay for each unit (or kilowatt hour) of gas you use. That means the impact of this change will depend on your household’s energy use. People who use less gas could benefit, while those with higher consumption may pay more through their unit rates.
Read the Government guidance on what this means for your energy bills.
What needs to change for a fairer energy system?
These changes will help some households, but more needs to be done to bring energy bills down for good.
What we’d like the government to do:
- Break the link between gas and electricity – this is keeping UK energy prices at the highest in Europe
- While the government will limit new policy costs on energy bills, we’d like them to remove all existing policy costs from your electricity bill
- More targeted support for households to make energy more affordable for the long term
Good Energy CEO, Nigel Pocklington, explains that the government have “taken some welcome steps to ease the pressure of high energy costs on households, but much of the support is temporary and the Budget falls short of the bolder changes needed to bring electricity bills down for good.”
Nigel has commented on the Autumn Budget in an article in iNews. Read Nigel’s response.
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FAQs:
Some households could benefit from the changes, but the impact will vary. Eligible households will receive a one-off £100 payment, and the temporary 0% VAT rate on eligible household electricity supplies has been extended until July 2027. However, these measures don’t guarantee lower bills for everyone.
The payment is for eligible households in council tax bands A to D in England. Payments are expected to start from January 2027. This will go straight into your bank account if you pay via direct debit.
- The £100 payment is expected to begin in January 2027.
- The temporary VAT removal on household electricity has been extended until July 2027.
- The government has asked to remove domestic gas standing charges by the end of 2027.
There are several ways to reduce energy use and potentially lower your bills, from improving insulation and using heating controls to exploring technologies such as solar panels and heat pumps. The Warm Homes Loan Scheme aims to make some home energy improvements more accessible through affordable finance.
