Budget 2026: Higher Energy Bills Despite Household Support?

TVS News AI, editorially supervised, presents Budget 2026: Higher Energy Bills Despite Household Support.

John Healey has presented the 2026 budget as a “scattergun” budget. The Resolution Foundation says it is a budget that does little to improve living standards. At the same time, the think tank warns that the planned measures to reduce energy costs will not be enough: gas and electricity bills are expected to be higher this year than during the last energy shock.

The criticism is therefore not directed at every individual measure. The budget includes £100 in energy payments for up to 20 million households in council tax bands A to D and provides for the abolition of fixed gas charges. However, the Resolution Foundation believes these measures primarily benefit households that need support the least.

Support Is Barely Distributed According to Income

The decisive figure

The poorer half of households is expected to gain an average of £158 through the available subsidies this year and next year. The richer half will receive £144, only £14 less.

This means the gap between the two groups is small, according to Resolution Foundation calculations. Ruth Curtice, the think tank’s director, therefore describes this as a “complete failure to target help at those who need it most”. The budget does not target its support according to economic circumstances.

Why this is problematic

The think tank is highlighting a conflict of objectives. On the one hand, the measures are intended to counteract rising living costs. On the other hand, the larger sums do not automatically reach the households hardest hit by high energy prices. For a low-income family, a £100 payment therefore cannot automatically offset an increase in bills.

Healey has delivered a “scattergun” budget that has done little to improve living standards and leaves Great Britain with a “painful second half” of the parliamentary term.

A £100 Payment Per Household Will Not Cover Every Bill

Energy support at a glance

According to the report, the measures to combat rising energy costs include abolishing fixed charges on gas bills and energy payments of £100 for up to 20 million households in council tax bands A to D.

The Resolution Foundation nevertheless considers the design problematic. The energy support system continues to rely on property valuations from 35 years ago to determine eligibility for energy-cost support this winter. Healey is thus the latest chancellor to oversee a poorly targeted energy rebate system.

The comparison with the last energy shock

The think tank’s starkest conclusion is: Even families receiving support are expected to face higher energy costs this year than during the last energy-price shock. In this context, support therefore does not mean that bills will fall below their previous level. The assistance eases the increase but does not close the gap between bills and the burden experienced during the energy shock.

The Focus on Living Standards Deepens the Dispute

What households can expect

The Resolution Foundation forecasts that typical disposable incomes will fall by £1,050 between the current time and the end of the parliamentary term in 2028/29. Across the entire five-year parliamentary term, the increase would therefore amount to just £600.

Against this backdrop, the budget is seen as an attempt to give the population “breathing space” in the face of a global economic storm. However, the support measures are spread too broadly and do little to meet the acute challenges facing households. Curtice warns that support for living costs is being distributed too thinly.

The political dispute

Healey defended the measures by saying their aim was to cushion inflation while also stimulating the economy. His budget also includes tax relief for city-center businesses as well as higher taxes on banks and gambling.

Andy Burnham, who defended the measures to broadcasters, described the assistance for 20 million households this winter as “pretty bold”. He also emphasized that 70,000 businesses would be completely exempt from business rates. This political backing comes alongside the Resolution Foundation’s warning that household support is barely targeted and energy costs will remain higher than during the last energy shock.