UK Government Plans £100 Energy Payments for Council Tax Bands A to D in January 2027

Up to 20 million households in England are set to receive a £100 energy payment from January 2027 under government plans targeting homes in council tax bands A to D.

The Department for Energy Security and Net Zero outlined the Household Energy Payment in an explainer published on 28 October 2026, alongside measures addressing gas standing charges and energy debt. Local authorities will administer the payments through the council tax system.

The government estimates the payment will reach 83% of fuel-stressed households in England and 88% of households in the lowest three income deciles, representing the bottom 30% by income.

Who Qualifies for the £100 Payment?

Eligibility depends on the property being the household's main home, falling within bands A to D and the householder being liable for council tax.

Most households exempt from council tax will also qualify, although the government has yet to publish the full eligibility rules.

Second homes and empty properties are excluded. Households where the householder is not responsible for paying council tax will also be ineligible. The department said, 'The payments will be made from January 2027.'

Residents can check their property's band through the government's online council tax band checker. The payment scheme applies in England; Scotland, Wales and Northern Ireland will receive additional funding, with their governments deciding how to provide comparable support based on local needs.

Direct Debit Payers Will Receive Money Automatically

Eligible households that pay council tax by direct debit will receive the money directly into their bank accounts without having to apply.

Councils will invite eligible residents who use other payment methods to submit an application. The government's explainer does not give a specific payment date for every household.

The department warned: 'Nobody other than your council should get in touch asking you to claim the rebate.'

It advised residents to share personal information only when certain they are dealing with their council, and to contact the authority directly if a message appears suspicious.

Councils Get Extra Funding for Households Outside the Scheme

The government will provide councils with another £100 million for discretionary assistance to households that need help but do not qualify for the payment. Each council will set its own eligibility conditions and publish application details on its website once local arrangements are ready.

People receiving means-tested benefits may also qualify for the £150 Warm Home Discount, which IBTimes UK also reported on. This is separate from the new Household Energy Payment.

The government also plans targeted debt relief for vulnerable households. Its explainer identifies billpayers receiving means-tested or disability benefits, and pensioners, with debts accumulated since the 2022–2024 energy crisis.

Support will depend on re-engaging with suppliers and taking steps towards repayment. The Office of Gas and Electricity Markets (Ofgem) will consult on the scheme's final design.

Gas Bill Reform Will Shift Costs to Usage

The payment accompanies plans to remove gas standing charges, the fixed fees households pay regardless of consumption.

The Independent reported that Chancellor John Healey would ask Ofgem to implement the change for around 23 million homes in 2027 or as soon as possible afterwards.

Those costs will move into the price charged for each unit of gas. The Treasury said 60% of households could save an average of £45 annually, according to the newspaper.

Savings will therefore depend on consumption. The government plans targeted protection for some vulnerable households whose high gas use is unavoidable.

Ministers are also extending the removal of value-added tax (VAT) from household electricity bills until July 2027. The department attributed this year's higher energy bills to the conflict in the Middle East and said longer-term reforms would reduce exposure to volatile international gas markets.