UK Chancellor John Healey unveils £100 winter energy payment in 2026 Budget

Twenty million UK households in council tax bands A to D will receive a £100 winter energy payment paid directly into their bank accounts under a £2.6 billion relief scheme announced by Chancellor of the Exchequer John Healey. Delivering his first Budget in Parliament today - the first of its kind under Andy Burnham's leadership - Mr Healey took to the House of Commons at 12.30pm on Wednesday, October 28, after Prime Minister's Questions, positioning the package as necessary breathing space for families facing rising energy bills driven by the conflict in the Middle East.

The measure forms part of a wider cost-of-living and tax strategy under the administration of Prime Minister Andy Burnham. The Chancellor told MPs that the Government is sticking by its manifesto pledge not to raise taxes on working people.

Who gets the £100 winter energy payment and how does it work?

The financial assistance is targeted specifically at households in council tax bands A to D across the United Kingdom. Mr Healey confirmed that the money will be given to devolved administrations, calling on them to do the same and give people of all nations in the UK breathing space on their energy bills this winter.

Alongside the direct bank payments, the Treasury announced that standing charges on gas bills, which cover the cost of delivery to homes and businesses, will be scrapped from 2027 or as soon as possible after. Furthermore, the current cut to VAT on electricity is being extended through the winter and spring to July, taking £50 off the annual price cap for 29 million households. The Green Party criticized the gas standing charge abolition as tinkering, with a spokesperson arguing that energy bills have skyrocketed and are set to rise by hundreds of pounds again this winter.

What are the tax changes for banks, savers, and motorists?

To help finance the immediate support measures, the Chancellor announced an extra 3% on the Bank Surcharge, starting in January and ending 15 months later. Mr Healey acknowledged the contributions of the nation's financial sector but stated that he is looking to banks to help fund breathing space for British families.

Savers received clarity as Mr Healey announced that the tax-free cash ISA limit would remain at £20,000, stating he will not go ahead with the cut to the tax-free amount and will work with the sector to create a new "Starter ISA" to reward first-time investors. For motorists, the 5p cut to fuel duty and slashed red diesel rates are extended through the winter and spring to July, supporting households, hauliers, and farmers. the higher mileage rate for workers who rely on their cars, such as care workers and engineers, is increased from 25p to 35p per mile, and the increase to the standard mileage rate introduced earlier in the year is made permanent.

Which businesses and regional projects will receive backing?

British industry is slated for support through a new British industrial competitiveness scheme that will take 25% off electricity bills for 10,000 firms at the heart of British industry, going live in April with backdated payments for energy costs this year too. Small businesses in retail, hospitality, and leisure will see the threshold for small business rate relief raised to £18,000, and rates frozen for all other firms in these sectors in real terms. High street support will be funded by raising taxes on gambling, by increasing Machine Games Duty from 20% to 25% for higher stakes machines while protecting pubs and seaside arcades.

The Chancellor announced that all business rates will be retained locally by the end of the decade with 20% of revenue going to mayors from next year.

1. 11:15am - Around this time Chancellor John Healy will leave Downing Street holding the iconic red box, ready to deliver the Budget
2. 12pm - As is usual for Wednesday, Prime Minister Andy Burnham will face PMQs in the Commons
3. 12:30pm - After PMQs, Chancellor John Healey will deliver the Budget
4. Afternoon: We can expect to hear from the Office for Budget Responsibility later in the afternoon, though a time has not been confirmed. The OBR will publish its updated forecasts, inflation, interest rates, and house prices.

Following the Chancellor's address, Leader of the Opposition Kemi Badenoch is scheduled to present her response. Later in the afternoon, the Office for Budget Responsibility will publish its updated forecasts detailing figures for inflation, interest rates, and house prices.