Autumn Budget 2026: What It Means for Your Heating and Energy Bills
The Chancellor delivered the Autumn Budget on 28 October 2026, and there’s plenty in it for anyone who heats a home. Some changes will lower your bills this winter. Others, like the end of 0% VAT on heat pumps next April, mean it pays to plan ahead.
Here’s our plain-English guide to what’s changed, what hasn’t, and what it means for you.
At a glance
- 0% VAT on electricity extended until July 2027
- £100 energy payment for households in England in council tax bands A to D, from January 2027
- Gas standing charges to be scrapped, with the aim of doing so by the end of 2027
- Boiler Upgrade Scheme grants stay at £7,500, or £9,000 for oil and LPG homes until 31 March 2027
- VAT on heat pumps, insulation and heating controls goes back up from 0% to 5% on 1 April 2027
Help with your bills this winter
VAT on electricity stays at 0%. The VAT cut on household electricity, which started on 1 October 2026, has been extended until July 2027. The government expects it to take around £50 off the annual price cap in April 2027. VAT on gas stays at 5%.
A £100 Household Energy Payment. Households in England in council tax bands A to D will get £100 paid directly into their bank accounts from January 2027. That’s up to 20 million homes. Scotland, Wales and Northern Ireland will set out their own plans.
Gas standing charges are going
The government has asked Ofgem to abolish gas standing charges on household bills, aiming for the end of 2027 or as soon as possible after. Right now the average household pays around £108 a year in gas standing charges, before using any gas at all.
The cost won’t disappear entirely. It will move onto the price you pay per unit of gas. That’s good news for homes that use less gas, and a reason to make sure your system is running as efficiently as it can. An annual boiler service and good heating controls both help.
Electricity standing charges will also be reformed, with details due next year.
The Boiler Upgrade Scheme: grants stay the same, but the pot isn’t growing
If you’ve been thinking about a heat pump, the grant amounts haven’t changed:
- £7,500 towards an air source or ground source heat pump
- £9,000 for homes currently heated by oil or LPG, available until 31 March 2027
What has changed is the scheme’s budget. Funding stays at £400 million for 2027 to 2028, rather than rising to the £600 million previously planned. With demand for vouchers at record levels, we’d recommend getting your survey booked sooner rather than later.
VAT on heat pumps goes back to 5% in April
Since 2022, heat pumps, insulation and heating controls have had 0% VAT. That relief ends on 31 March 2027, and the rate goes back to 5% from 1 April 2027.
On a typical heat pump installation, that’s a noticeable difference. If you’re planning an upgrade in the next year, getting it installed before April could save you money.
Changes to wider support
- Warm Homes Plan: around £1 billion has been trimmed from the plan, though the Treasury says most funding for low-income households and social housing is protected.
- ECO4: the Energy Company Obligation scheme closes on 31 December 2026.
What should you do now?
- Check your council tax band to see if you’ll get the £100 payment in January.
- Get your boiler serviced before the coldest weeks. An efficient boiler matters even more as standing charges move onto unit prices.
- Thinking about a heat pump? Book a survey now to make the most of the BUS grant and 0% VAT before April.
- Protect your system this winter with a Care Plan, from £12.50 a month.
Talk to us
We’ve been keeping homes warm since 1980, and we’re here to help you make sense of what the Budget means for your home. Call our friendly team on 0330 383 0000 or get in touch at customheat.co.uk.
