9th November 2026
The Government's latest attempt to help households cope with rising energy bills has produced an uncomfortable contradiction. While millions of households will receive a £100 payment, new analysis suggests that nearly 700,000 of Britain's poorest households will miss out altogether.
At the same time, around 3.5 million households in the wealthiest fifth of the population are expected to receive the money.
It raises an obvious question. If the purpose of the scheme is to help people struggling with energy bills, why is eligibility being determined primarily by the council tax band of their home rather than their income?
The £100 payment was announced in the October 2026 Budget as part of a wider £2.6 billion Household Energy Payment scheme. Payments are expected to begin in January 2027, with more than 20 million households potentially benefiting.
The headline figures sound generous. However, the way the money is distributed has attracted considerable criticism.
A system based on property values, not poverty
Under the scheme announced for England, households living in properties in council tax bands A to D qualify for the £100 payment, provided the property is their main residence and they meet the eligibility conditions.
The Government argues that using the council tax system is the quickest practical way to get money to a large number of households.
There is some logic to that argument. Local authorities already hold council tax records, and payments can be organised without requiring millions of people to complete applications or undergo individual financial assessments.
But there is a fundamental weakness.
Council tax bands are based on property valuations dating back to April 1991. They do not tell us what somebody earns today, how much they have in savings, whether they are working, whether they have children or whether they are struggling to meet their monthly bills.
A retired couple who have paid off their mortgage and live comfortably in a Band C property could receive £100.
Meanwhile, a working family with several children, a large mortgage and considerable heating costs living in a Band E property could receive nothing.
A disabled person living in a larger property, perhaps because of accessibility requirements or family circumstances, could also miss out despite having a very limited income.
The system is therefore using an old property valuation as a substitute for a much more complicated question: who actually needs financial assistance?
The figures expose the problem
Analysis by The Independent and the Resolution Foundation suggests that nearly 700,000 households in the poorest fifth of the population will miss out.
These households contain an estimated 1.64 million people.
At the other end of the income scale, approximately 3.5 million households in the wealthiest fifth are expected to receive the payment. They will collectively receive around £350 million.
The Resolution Foundation has also highlighted that approximately 1.4 million households in the bottom half of the income distribution are expected to miss out.
These figures illustrate the difficulty of using a broad property-based test to distribute money intended to help people on low incomes.
The Government points out that its scheme should still reach around 88 per cent of households in the bottom three income deciles. That is a substantial proportion, but it also means that a significant minority of lower-income households will be excluded.
The Government has defended its approach on the grounds that it can get money to people quickly. It also points to other assistance, including the £150 Warm Home Discount for eligible households.
However, reaching most people in need is not quite the same as ensuring that the people most in need receive help.
Why not use income instead?
One obvious alternative would be to base payments on household income or eligibility for means-tested benefits.
That would make it easier to distinguish between a wealthy household in a modest property and a struggling family in a more expensive home.
There are already systems through which government can identify many people receiving Universal Credit, Pension Credit and other qualifying benefits.
The Warm Home Discount demonstrates that automatic assistance can be organised using benefit eligibility and other qualifying criteria.
However, income testing also has complications. Some people on low incomes do not claim the benefits to which they are entitled. Others have fluctuating earnings, savings or household circumstances that make assessment more complicated.
There is also the risk of delaying payments while individual circumstances are checked.
The Government has therefore opted for speed and administrative simplicity rather than precise targeting.
That is a policy choice, but it should not prevent questions being asked about whether the resulting distribution is fair.
Scotland faces its own decisions
The arrangements are slightly different in Scotland, Wales and Northern Ireland.
The £2.6 billion announced by Westminster includes funding for the devolved administrations through the Barnett formula. The Scottish Government has indicated that it intends to provide a similar £100 payment and will work with local authorities on delivery.
Finance Secretary Jenny Gilruth has acknowledged that using council tax bands is not a perfect solution.
Scotland has approximately 1.9 million homes in council tax bands A to D. If all qualifying households receive £100, the cost would be around £190 million.
There is a particular issue for rural Scotland.
In places such as Caithness and Sutherland, property values and household incomes do not necessarily move together. A modest rural property can fall into a higher council tax band without the people living there having anything approaching a high income.
Older residents living alone, families with children and people with disabilities can all face substantial heating costs.
A property that might appear relatively valuable on paper can be expensive to heat, particularly if it is older, detached or exposed to the weather.
The Scottish Government and councils therefore have an opportunity to consider whether additional support can be directed towards households that fall outside the main payment arrangements.
The precise Scottish eligibility and delivery arrangements will matter. It should not simply be assumed that the English rules automatically settle the position in Scotland.
The £100 million question
In England, the Government has also announced a separate £100 million discretionary fund for local authorities to help households that are struggling but do not qualify for the main payment.
This recognises that the main scheme will leave some vulnerable people without assistance.
However, £100 million is a relatively small amount alongside the £2.6 billion main scheme.
It will also be up to individual councils to establish how the discretionary money is distributed and which households receive assistance.
That could produce differences between neighbouring local authorities. Someone in one council area might qualify for additional help while a household in very similar circumstances elsewhere receives nothing.
There is a case for giving councils flexibility because they understand local conditions. But there also needs to be transparency about how the money is allocated.
The position in Scotland will depend on the arrangements made by the Scottish Government and its local government partners.
Is £100 really enough?
There is another issue that should not be overlooked.
The £100 payment is a one-off contribution towards energy bills, not a lasting reduction in the cost of heating a home.
For a household facing several hundred pounds in additional annual energy costs, it will provide some breathing space but will not resolve the underlying problem.
The wider Budget package also includes an extension of the temporary VAT reduction on domestic electricity. The Government estimates that this could reduce the annual energy price cap by around £50 in April 2027.
There are also longer-term proposals to reform energy pricing and remove gas standing charges.
These measures may help, but households still face uncertainty over international energy prices, wholesale gas costs and the impact of geopolitical events.
For people already struggling with rent, mortgages, food, transport and other household expenses, another winter of expensive energy could be particularly difficult.
A better way of distributing help?
There is no perfect way to distribute emergency financial assistance to millions of households.
A universal payment is simple but expensive. A tightly means-tested payment can be more accurately targeted but may be slower and risk excluding people who do not claim benefits.
One possible compromise would be to retain a basic payment for households in lower council tax bands while providing additional assistance to people on low incomes, regardless of the value of their property.
That could include pensioners, disabled people, larger families and households with unusually high heating requirements.
Councils could also be given properly funded discretion to identify people who fall outside the standard eligibility rules.
The important thing is that the system should recognise the difference between the value of somebody's home and their ability to afford to live in it.
The Government has found £2.6 billion to help households with energy costs. The question now is whether that money will reach the households who need it most.
A £100 payment will be welcome to many people. But when some of the poorest households are excluded while millions of better-off households receive the same payment, it is reasonable to ask whether the Government has chosen administrative convenience over properly targeted assistance.
And for households already struggling to make ends meet, being told that their home is worth too much to qualify for help may be a particularly unwelcome message.