Budget 2026: £100 energy payment for millions and rise in bank tax as watchdog warns on stalling living standards – as it happened
News Source
•Wed, 28 Oct 2026 18:24:25 GMT
📰 What Happened
Britain's new chancellor, John Healey, has delivered his first budget. The headline measure is a £100 energy payment for homes in council tax bands A to D, which covers about 80% of households. Healey also scrapped the daily standing charge on gas bills, which he says saves 60% of homes about £45 a year. The bank surcharge rises from 3% to 6%, but only for 15 months. There is a new savings account for first-time buyers and a 2-point rise in tax on rental income. The budget watchdog said living standards will be just 1% higher than before the pandemic by the end of the decade.
🔍 The Backstory
The Office for Budget Responsibility painted a grim picture. It called recent years a "dismal period in British economic history". Real household income per person is growing at under 0.1% a year, the weakest on record. The tax burden is heading to a record high, and growth forecasts for 2027 were cut. Borrowing is 4.2% of the economy this year, leaving the chancellor only £15bn of room. Critics said the budget spread small sums widely. The Resolution Foundation noted that 1.4 million poor families miss out on the energy payment.
🎯 Why It Matters
For UK households, the help is small and short-lived. Energy bills, rents and taxes are still rising faster than pay for most people.
Britain's new chancellor, John Healey, has delivered his first budget. The headline measure is a £100 energy payment for homes in council tax bands A to D, which covers about 80% of households. Healey also scrapped the daily standing charge on gas bills, which he says saves 60% of homes about £45 a year. The bank surcharge rises from 3% to 6%, but only for 15 months. There is a new savings account for first-time buyers and a 2-point rise in tax on rental income. The budget watchdog said living standards will be just 1% higher than before the pandemic by the end of the decade.
The Office for Budget Responsibility painted a grim picture. It called recent years a "dismal period in British economic history". Real household income per person is growing at under 0.1% a year, the weakest on record. The tax burden is heading to a record high, and growth forecasts for 2027 were cut. Borrowing is 4.2% of the economy this year, leaving the chancellor only £15bn of room. Critics said the budget spread small sums widely. The Resolution Foundation noted that 1.4 million poor families miss out on the energy payment.
For UK households, the help is small and short-lived. Energy bills, rents and taxes are still rising faster than pay for most people.