energy payment, USA News (Surrey): New research has revealed that more than 800,000 low-income households struggling with energy bills will miss out on the £100 promised in the Budget. Chancellor John Healey announced last week that a one-off £100 Household Energy Payment would be made available to those living in council tax bands A to D in England, with Wales confirming it will match the payment and the Scottish government pledging to replicate it.
Official figures indicate that around 20 million households in council tax bands A to D will receive the sum paid directly into their bank accounts in January, intended to help with soaring energy costs. The £2.6bn scheme is funded through an increase in the tax on big bank profits from 3% to 6%, running from January next year through to April 2028, alongside higher taxes on high-stakes gambling machines.
However, as the scheme operates through the council tax system and is not means tested, new analysis from Policy In Practice has found that 838,000 households currently claiming Council Tax support will not benefit from the additional help announced by the Chancellor, despite battling rising energy costs in larger properties.
Policy In Practice noted that official estimates suggest 12 per cent of households in the bottom 30 per cent of incomes would be ineligible for support, while 17 per cent of fuel-stressed households — those spending at least 10 per cent of their family budget on energy bills — would also lose out. Social policy think tank Policy in Practice has revealed that a low-income family of five or more is 1.6 times more likely to reside in a property within council tax bands E-H, compared to the average low-income household.
As a result, more than 130,000 larger, low-income families stand to miss out on the £100 payment this winter.
Energy provider EDF forecasts that households will face a rise of £469 on January 1, pushing average bills to £2,192 annually. Fellow supplier E.On Next predicts a similar increase of £460.
John Healey said the scheme was designed to take the pressure off in the coldest months and see people through to the spring.
Deven Ghelani, the director of Policy in Practice, said: Over 800,000 low-income families are going to be missing out on this vital relief from high energy bills. Millions of people are also missing out on over £24bn of wider support that is going unclaimed each year because of low awareness, administrative complexity and stigma.
Campaigners have condemned the use of council tax bands, which are based on 1991 property valuations, and have been pressing the government to develop a scheme founded on household income or eligibility for certain benefits. Policy in Practice said: Council tax bands are an imperfect proxy for household needs. Low-income households can live in larger, higher-band properties, and often have little choice over the size or band of property they’re allocated. And increasingly, several families or generations share a home to manage costs.
The think tank further revealed that 84 per cent of households failing to qualify for the £100 payment are home to a disabled person, have children, or fall below the poverty line.
Those on lower incomes are also less likely to pay their bills via direct debit, meaning the funds will not be transferred to them automatically.
Mr Ghelani added that many low-income households were overdrawn, meaning the support intended to assist with heating costs would instead be swallowed up by existing debt.
He announced at the budget that he would ask Ofgem to remove the fixed daily standing charge from gas in 2027, or as soon as possible afterwards.
A government spokesman said: Tackling the affordability crisis is our priority, which is why we’re giving families immediate breathing space. From January, millions of households will receive £100 towards their energy costs from January, alongside action to make bills fairer, including removing standing charges from gas bills and supporting those in energy debt.
