Chancellor gives £100 to help with energy bills

04 November 2026 | Mrge_Acontants

Chancellor John Healey is giving around 20m households in council tax bands A to D in England £100 to help with their energy bills. Scotland, Wales and Northern Ireland will receive funding, but they will decide for themselves how that should be spent. The Chancellor also announced £100m of further funding for local authorities to help people who are “acutely impacted by rising energy bills”. The VAT cut on electricity bills will also be extended until July 2027, to help keep bills in check.

The Chancellor has also asked Ofgem to remove standing charges on gas bills, something that isn’t expected to happen before the end of 2027, “or as soon as possible after that”. Standing charges for electricity bills are set to be reformed, but details about how this may happen will be outlined next year. But some commentators are concerned that this could ultimately lead to higher energy bills for some, as the unit price of gas would most likely increase.

The current 5p cut in Fuel Duty will also continue until July next year, to offset some of the pain of rising fuel costs triggered by the Iran war.

These were some of the biggest headline measures to help households who are getting ready for the winter, in a Budget that contained 98 separate measures, and covered everything from Individual Savings Accounts (ISAs), pension taxation, and raising tax on property income.

What has changed for property income?

The Chancellor has decided to increase the amount of tax you pay on income from property and savings by a further 2 percentage points, on top of the increase announced in the Budget of 2025 by Rachel Reeves, John Healey’s predecessor.

Planned increases were announced in the Budget in 2025, to raise the rates of tax on income from savings and property across all tax bands from April 2027 by 2 percentage points. The Chancellor raised these rates by a further 2 percentage points in the Budget in October, which will apply from April 2027.

Elsa Littlewood, a tax partner at BDO, said: “This change comes with a sting in the tail for those saving outside ISAs. From April 2027, people with savings outside of tax-sheltered ISAs will face a further two percentage point increase in income tax on their savings above the savings threshold. This will mean basic rate taxpayers will pay 24%, higher rate taxpayers 44% and additional rate taxpayer 49%, meaning almost half of savings interest for the wealthiest will be eaten up by tax.”

This was described as “a fair and proportionate approach” by the Government, as “84% of income taxpayers will be unaffected by these changes”.

The Government added: “This also raises revenue in a progressive way, so that those who earn more contribute more. Around half of the revenue raised from this change is expected to come from the top 10% of households.”

However, Charlie Newsome, Senior Investment Director at Rathbones, said: “For landlords, this is another turn of the screw. Higher borrowing costs, tougher regulation and an increasingly unfavourable tax environment have steadily chipped away at the appeal of buy-to-let, and this latest tax rise adds to the burden.

“We’re increasingly hearing from clients asking whether being a landlord is still worth the hassle, with some looking to sell up or reduce their portfolios. For some, stocks and shares are increasingly looking like a more attractive alternative, without many of the costs and complications that come with being a landlord.”

How did things change for ISAs?

There were various changes announced for ISAs. One of the biggest was the scrapping of the planned reduction for ISA allowances from £20,000 to £12,000 which was due to happen from next April for those under 65.

The Chancellor also announced a new First Time Buyer ISA which will replace the Lifetime ISA for new savers and will be available from April 2029, and will “retain the generosity of the Lifetime ISA, allowing contributions of up to £4,000 a year with a 25% government bonus”.

Sarah Coles, head of personal finance at AJ Bell, said: “The First Time Buyer ISA has been weaved reasonably effectively through a landscape already heavily populated with ISAs designed for this group – the Lifetime ISA and the now-closed Help to Buy ISA. However, it’s going to take some time to arrive. It’s one of the reasons why there’s plenty of life left in the LISA.

“The most significant departure is that this top up will come at the point when you exchange contracts on a new home and will be paid on the total held in the ISA at the time – capped at a bonus of £20,000. That should be easier to understand for savers, with the bonus paid on the full amount rather than the total contribution. It also means if you need to withdraw money for any reason other than buying your first home, there will be no penalty – you will simply not receive the government bonus.”

This bonus will be paid on the value of the account balance when the funds are withdrawn, to fund a qualifying first home purchase of up to £450,000. There will be no age restriction for those who want to buy their first home. But there is a change for those who already have a Lifetime ISA.

The Government said: “In recognition that some Lifetime ISA holders may wish to purchase a property above the £450,000 property price cap, the government will from October 29, 2026, allow Lifetime ISA funds to be withdrawn for such purchases which otherwise meet the qualifying rules, with a reduced withdrawal charge of 20%, ensuring the value of individual contributions is protected if the value of the property is above the price cap.”

What other measures were announced?

There were various other measures announced, too many to include here, but some of the other measures that affect individuals and businesses include:

• National Minimum Wage and National Living Wage to increase by 3.9%.
• State Pension will increase by 3.9% next year.
• Tariffs on more than 100 supermarket products suspended to reduce costs.
• An extra £1.5bn set aside for social housing.
• £432m across 2027/28 and 2028/29 to combat homelessness.
• Leisure, hospitality and retail businesses to benefit from business rate relief extension from £12,000 to £18,000.
• Bank surcharge increased by 3%, meaning it will rise to 6% for 15 months from January to fund the support on energy bills announced.
• Target of reaching 3% of GDP on defence spending by 2030.
• Expanding paid parental, partner and adopter leave to self-employed people from April 2029.
• Introducing a new Pension Tax Allowance so that pensioners with income up to the current Personal Allowance won’t need to deal with the admin of paying small amounts of tax.

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If you would like to find out how these or any other changes might affect you, your loved ones or your business, then please get in touch with us and we will explain what you need to know.