For households that may already be choosing between heating, food and other essentials, the 2026 Budget’s energy measures offer some help.
But they’re not a complete solution to rising bills, especially alongside costs continuing to increase in other areas of daily life.
Here’s a summary of what’s changing, who may benefit and what you can do now.
Short-Term Help with Electricity Bills
The temporary removal of VAT from domestic electricity bills, introduced on 1st October 2026, has now been extended until 1st July 2027.
Despite this, the Ofgem Energy Price Cap for 1st October to 31st December 2026 also rose by 4%, which means further costs for those on standard variable tariffs.
Should I Fix or Switch My Energy Tariff?
To try and avoid the worst effects of the increases, we would recommend:
- Looking into Fixed-Price Deals: At the moment (as of 9th November 2026), the cheaper fixes tend to be the longer ones – e.g. 18 or 24 months.
- Tip: This will give you price certainty for longer, especially since the Price Cap is predicted to rise by 29% from January 2027. But always focus on deals with low-exit penalties in case you want to switch to a cheaper deal later down the line.
- Discounted Price Cap Tariffs: There are deals out there that offer a fixed discount on the Price Cap for 12 months, which are better for higher users, such as:
- Outfox the Price Cap Tracker 12M: An average of 4% off unit rates, £75 per fuel in exit fees.
- So Energy So Green Tracker 24M: An average of 6% off unit rates (fixed for 24 months), £95 per fuel in exit fees.
- E.on Next Pledge Tracker 12M: An average of 3% off unit rates, £25 per fuel in exit fees.
- ‘Tracker’ Tariffs: E.g. Octopus Tracker and Agile Octopus. These are tariffs where the rate changes every day, or sometimes every half an hour (based on wholesale energy prices, which is what providers pay for gas and electricity).
See this guide on cheap fixed energy deals from MoneySavingExpert.com for more information.
Another measure announced in the October budget was a one-off household energy payment of £100. These will be provided from January 2027 and will only apply to addresses in council tax bands A, B, C and D.
In England, an additional £100 million will go to local authorities for targeted help, including some for households outside bands A to D.
What About Energy Debt & Standing Charges?
The government has also asked Ofgem to remove gas standing charges (which currently cost £108 per year), aiming for 2027 or as soon as possible afterwards.
This could affect around 23 million households, as fixed daily charges are expected to shift into gas unit rates. But this isn’t an ‘across the board’ cut to bills and will affect low and high-usage homes differently.
If you owe money, be sure to contact your supplier or seek support, rather than waiting for the scheme to be finalised.
How Does this Affect Those on Fixed Energy Tariffs?
If you’ve switched to a fixed energy tariff with gas standing charges now, you will still have to pay these charges.
However, if moving to a fixed deal will work out cheaper for you – don’t let this delay you from making the switch.
Struggling with Energy Costs?
While the Budget may provide some much-needed breathing space, if you’re struggling with energy costs, please contact the friendly and professional team at Angel Advance for free*, confidential debt advice today.
Would you prefer to do it online, without having to phone up? We also have a free online debt advice tool that shows you your options in under 15 minutes, which is available 24/7.
*Our advice is free, but if you sign up for a debt solution, a fee will apply for some solutions.
