Budget 2026: £100 towards energy bills and a temporary higher tax on banks

Chancellor John Healey delivered his first Budget on 28 October 2026. It focuses on relief for energy bills, with part of the cost covered by an extra tax on banks.

£100 energy payment

According to the chancellor's speech, published by the government, 20 million households in council tax bands A–D will receive £100 this winter. The money is to be paid directly into bank accounts. The scheme costs £2.6bn and is meant to help through the coldest months, up to the spring.

The Scottish, Welsh and Northern Ireland governments will receive their share of the funding. The chancellor called on them to pass on help to residents too. The sources available to us do not say exactly how the money will be paid out or how it will be distributed in each part of the country.

End of gas standing charges

Mr Healey said that from next year, through the regulator Ofgem, standing charges will be removed from household gas bills. He said they cost over £100 a year regardless of how much gas is used. The government says the change will cover around 23 million homes. Similar reforms are to follow for electricity bills.

Who will pay

Banks will pay an extra 3 percentage points under the Bank Surcharge. This is a temporary measure: it starts in January and runs for 15 months. The money is meant to fund immediate help with energy bills. The chancellor also announced higher taxes on gambling.

The speech also included the lines "£50 off VAT" and "£100 off Council Tax" as two tax cuts for this winter. We did not have access to the details, so we do not describe them.

Reaction

As BBC News reports, the chancellor is aiming to tackle the cost of living amid global economic turmoil. Opposition parties say the Budget is not bold enough.

What this means for you

If you live in a home in council tax bands A–D, you may qualify for the £100 payment. Details, including timing and how it will be paid, have not yet been confirmed in the sources we used. The removal of gas standing charges from next year is meant to apply to households across the country. It is worth watching announcements from your energy supplier and local council, and people in Scotland, Wales and Northern Ireland should follow decisions by their governments.