How will John Healey’s energy support package affect you?

Chancellor John Healey has unveiled a package of energy support measures designed to help British households facing record bills. The government plans to distribute a one-off payment of £100 in January to 20 million households in council tax bands A to D, costing £2.6 billion. This payment will arrive in bank accounts to provide what Healey called "breathing space" during the coldest months.

Healey promised to end standing charges on gas bills for 23 million homes "in 2027 or as soon as possible after", which could save households an average of £45 a year. The government removed the 5% VAT levy on electricity bills this month and has extended that relief through July, saving households about £50 a year. Healey said the government will remove policy costs that had been loaded onto bills under previous Conservative governments.

The chancellor also confirmed considering steps to remove standing charges on electricity, which add about £200 a year to the average bill. The government removed about three-quarters of subsidy costs for the UK's oldest renewable energy projects from bills and covered them through general taxation, lowering electricity costs by £42 a year according to research charity Nesta.

A Warm Home Loans scheme launched Tuesday, offering government-backed loans up to £35,000 for low-carbon energy alternatives like solar panels, home batteries and heat pumps. The government said households could save up to £550 a year with these installations, rising by a further £300 a year with a time-of-use tariff. The boiler upgrade scheme provides grants up to £7,500 toward the £13,600 cost of installing a heat pump.

A delayed debt relief scheme will launch in early 2027 to provide targeted support to customers in genuine financial need. The government said total household energy debt has reached £5 billion and could climb to £7 billion by year's end.

Average dual-fuel bills stand at £1,700 a year but could rise to more than £2,100 from January, according to industry forecasts. Martin Lewis, founder of MoneySavingExpert.com, said households could face a 25% cost increase and should not expect to feel better off than today.