New analysis from Policy in Practice shows that more than 838,000 low-income households will miss out on the £100 Household Energy Payment because they live in council tax bands E to H.
The one-off payment, announced by Chancellor John Healey, is available to households in council tax bands A to D in England, with Wales matching the payment and Scotland pledging to replicate it. Around 20 million households in those bands will receive the sum directly into their bank accounts in January.
Scheme details and funding
The £2.6bn scheme is funded by an increase in the tax on big bank profits from 3% to 6%, running from January next year to April 2028, alongside higher taxes on high-stakes gambling machines. The payment is not means tested and operates through the council tax system.
Policy in Practice noted that official estimates suggest 12 per cent of households in the bottom 30 per cent of incomes would be ineligible, while 17 per cent of "fuel-stressed" households — those spending at least 10 per cent of their family budget on energy bills — would also lose out.
Impact on larger families
The think tank revealed that a low-income family of five or more is 1.6 times more likely to live in a property in council tax bands E-H, compared to the average low-income household. This means over 130,000 larger, low-income families will miss out this winter.
Policy in Practice said: "Council tax bands are an imperfect proxy for household needs. Low-income households can live in larger, higher-band properties, and often have little choice over the size or band of property they're allocated. And increasingly, several families or generations share a home to manage costs."
Wider concerns and response
Energy provider EDF forecasts households will face a rise of £469 on January 1, pushing average bills to £2,192 annually. E.On Next predicts a similar increase of £460.
Deven Ghelani, director of Policy in Practice, said: "Over 800,000 low-income families are going to be missing out on this vital relief from high energy bills. Millions of people are [also] missing out on over £24bn of [wider] support that is going unclaimed each year because of low awareness, administrative complexity and stigma."
The think tank further found that 84 per cent of households failing to qualify for the payment are home to a disabled person, have children, or fall below the poverty line. Those on lower incomes are also less likely to pay bills via direct debit, meaning funds will not be transferred automatically.
A government spokesman said: "Tackling the affordability crisis is our priority, which is why we're giving families immediate breathing space. From January, millions of households will receive £100 towards their energy costs from January, alongside action to make bills fairer, including removing standing charges from gas bills and supporting those in energy debt."
