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Chancellor John Healey announced the payment in his first Budget on Wednesday, 28 October. It goes to households in council tax bands A to D in England, with funding for Scotland, Wales and Northern Ireland to offer similar support. The scheme costs £2.6 billion.
Healey told MPs: "I know that with the conflict in the Middle East, rising energy bills are a real worry. I know that people look to government at times like this not to solve all their problems, but to give them a bit of breathing space. So today, I'm taking one further step. This winter, for 20 million households in council tax bands A to D, I'm announcing a £100 energy payment for households, paid directly into people's bank accounts to deal with rising energy bills. That's a £2.6 billion scheme to take the pressure off in the coldest months and see people through to the spring."
The government's Budget summary says in 2027 the government is providing the £100 Household Energy Payment for up to 20 million households in bands A to D in England, the temporary VAT cut on electricity bills is extended until 1 July 2027 taking around £50 off the Ofgem annual price cap in April 2027, and the payment is paid for by increasing the Bank Corporation Tax Surcharge from 3% to 6% for 15 months ending 31 March 2028.
The same Budget also asks Ofgem to abolish gas standing charges.
Household bills rose in October and forecasters expect a further rise in January, with the price cap forecast to reach about £1,999 a year, up £276.
Green Party leader Zack Polanski dismissed the wider Budget statement as "a catastrophic let down" built on "cosmetic tweaks that will do nothing to buffer people against the fossil fuel rollercoaster".
Only bands A to D in England are covered directly and the devolved administrations have been urged, not required, to match it.