Budget 2026: Healey hikes taxes on banks and landlords to fund £100 handouts to 20m households

The government’s Autumn Budget, delivered by Chancellor John Healey on 28 October 2026, pledges a short-term package of support aimed at easing household energy costs while raising revenue through targeted tax changes to banks and property-related incomes. The centrepiece for households is a one‑off Household Energy Payment of £100 for up to 20 million homes in council tax bands A to D in England, paid from January 2027 and budgeted at around £2.6 billion. The payment will be channelled through the council tax system so most eligible households paying by direct debit need do nothing to receive it. The Scottish, Welsh and Northern Ireland administrations will be allocated their share of the funding and the Treasury has invited them to provide equivalent support in their nations. [1]

The Budget documentation and the Chancellor’s speech set this measure in the context of rising energy costs driven by “global uncertainties and pressures”, and position the £100 payment as temporary breathing space through the winter months rather than a structural subsidy. The government also reaffirmed earlier measures to limit household bills: a temporary cut to VAT on household electricity will be extended until 1 July 2027 and the Budget announces further reforms intended to remove standing charges on household gas bills (with similar reforms for electricity to follow), aiming to reduce costs and exposure to volatile international gas markets. The Office for Budget Responsibility’s modelling cited in the Budget suggests these interventions will slightly lower inflation in 2027. [1]

To meet the cost of this short‑term support, the Treasury identified a series of revenue measures described in the Budget document as “fair and proportionate”. The Bank Corporation Tax Surcharge — a charge on large banks — will rise from 3% to 6% for a 15‑month period, ending on 31 March 2028. The government also said it would increase taxes on income from property and savings in a “fair and proportionate way”, while reversing a previously planned cut to the cash ISA allowance to support tax‑free saving. Additional, smaller duty changes (for example to certain gambling machine rates) and reforms to capital allowances are also expected to raise revenue and reshape investment incentives. The Budget text frames these as targeted choices to fund immediate household and business support while protecting growth incentives.

Delivery and targeting details are documented but leave some operational questions open. Eligibility for the Household Energy Payment is defined by council tax band (A–D) and liability for the property as a main home; second homes and properties where the householder is not council tax liable are excluded. The government says most households exempt from council tax will be included and promised full eligibility rules in due course. Administration will use council tax data and direct payments for many recipients, and Homes England, backed by a National Housing Bank vehicle, will play a role in delivering parts of the scheme, with a review scheduled next autumn. The Budget also includes a short‑term Debt Relief Scheme for vulnerable households with energy debts, contingent on re‑engagement with suppliers and final Ofgem design. [2]

Implications and remaining uncertainties are clear in the official record. The £100 payment is modest relative to average household bills but is designed for rapid deployment and broad coverage of lower‑band households. It is explicitly temporary and financed through higher contributions from banks and increased taxation of property and savings income, choices the government presents as redistributive and targeted. Key practical details — full eligibility rules, the mechanism and timetable for payments to devolved administrations, and the final design of the energy debt relief measures — are to be published or consulted on in the months ahead. [1]