The measure, announced by Chancellor John Healey in the Autumn Budget on 28 October, forms part of a £2.6 billion support package. It comes as households face another increase in energy bills, with forecasts suggesting a rise of £276 a year for a typical household in January.
Who Qualifies for the £100 Energy Payment?
The Household Energy Payment will be available to households living in properties within council tax bands A to D in England. Eligibility will not depend on income, savings or whether residents receive benefits.
According to the Department for Energy Security and Net Zero, the scheme will cover up to 20 million households, including an estimated 83 per cent of fuel-stressed households and 88 per cent of those in the three lowest income deciles.
Eligible households paying council tax by direct debit will receive the money automatically from January 2027. Those using other payment methods will be invited by their local council to apply.
Most households exempt from council tax will also qualify, although the government has yet to publish the complete eligibility criteria. Second homes, empty properties and households where the householder is not responsible for council tax will be excluded.
Students living in university halls will not qualify, while those occupying eligible private properties may receive the payment through arrangements made by local authorities.
Residents can check their property’s council tax band using the government’s official postcode checker. The classification is based on property values from April 1991, meaning some high-value homes may qualify while financially struggling households in bands E to H will not.
The Treasury will also provide additional funding to Scotland, Wales and Northern Ireland. Their governments will determine how equivalent support is delivered.
Why the Payment May Not Cover Rising Energy Bills
The payment arrives amid concerns that heating costs will increase during the coldest months of the year.
According to BBC reporting, consultancy Cornwall Insight forecasts that a typical household’s annual energy bill could rise by £276 in January. More recent forecasts suggest bills could increase by around £400, reaching £2,100.
The £100 payment will therefore cover only part of the anticipated increase for many households.
The government has also extended the removal of VAT from domestic electricity bills until July 2027. The measure, introduced on 1 October, is expected to save households an average of £45 annually.
Another change will involve removing standing charges from household gas bills as early as 2027. These fixed charges will instead be transferred to unit rates, potentially benefiting households using less gas.
According to the Independent, the Treasury estimates that 60 per cent of households could save an average of £45 annually through this adjustment.
Ministers have also announced an additional £100 million for councils to assist households excluded from the £100 payment, alongside a proposed debt relief scheme for eligible vulnerable energy customers.
The payment will be funded partly through a temporary increase in the surcharge on bank profits, rising from three to six per cent for 15 months.
For eligible households, the £100 will arrive as cash rather than an energy account credit, allowing recipients to decide how to use it.
