Around 3.5 million of the UK’s richest households are set to receive Labour’s one-off £100 energy payment designed to provide a much-needed boost to the poorest this winter, new research has revealed, reports BritPanorama.
Despite being earmarked for those struggling with rising costs, households in the top 20 per cent of incomes will receive £350 million (14 per cent) of the funding, analysis by The Independent with the Resolution Foundation think tank shows.
Meanwhile, just under 700,000 of the poorest households – those in the bottom 20 per cent of earners – will miss out. These households house 1.64 million people, according to an assessment of official data.
Over 20 million households across the UK will begin receiving their Household Energy Payment in January after the measure was announced by Chancellor John Healey at the Autumn Budget.
The payment will grant all households in council tax bands A to D an automatic £100 rebate applied directly to their bills, a decision costing the government £2.5 billion.
Alex Clegg, economist at the Resolution Foundation, commented: “With the Energy Price Cap forecast to rise to over £2,100 in January, families are set for a tough winter and fresh support in the Budget was sorely needed.”
However, he noted that delivering help via flat £100 payments to four-in-five households across Britain fails to direct aid where it’s most needed. “Around 700,000 families in the poorest fifth of the country won’t get any support at all,” he said.
Additionally, the government is spending £350 million on aid to families in the richest fifth, which Clegg termed “a complete waste of money.”
Central to the issue is the decision to link the payment to the “outdated” council tax band system, which experts argue makes it poorly targeted.
In England and Scotland, values remain based on bands first set in 1991, meaning that the vast increase in house prices over the past three decades is not reflected in the current system.
For instance, a property worth up to £40,000 in 1991 remains in Band A, even if its market value has since risen significantly.
Properties valued up to £88,000 three decades ago remain in Band D, thereby entitling owners of homes now worth well over £1 million to the bill support.
Hackney Council in London has seen significant property growth since the original valuations were issued, rising from £68,264 in 1995 to £611,648 in 2026 – a 796 per cent increase.
Similar trends are noticeable in Waltham Forest (728 per cent), Brighton (704 per cent), and Bristol (683 per cent).
Around 1.4 million households in the lower half of incomes are set to miss out on the energy payment due to its design, as highlighted by Resolution Foundation figures.
Liberal Democrat Treasury spokesperson Daisy Cooper MP remarked: “The government’s energy support is too timid and not well targeted.”
Cooper criticized the reliance on the outdated council tax system, which has resulted in an absurd situation where low-income households lose out while wealthy retirees benefit.
Government sources contend that the council tax method was chosen for its speed in reaching a large number of households this winter. Officials estimate it will reach 88 per cent of low-income households, though it omits 12 per cent.
Some experts have suggested expanding the Warm Home Discount, which provides a £150 rebate annually to qualifying households, as a more effective strategy.
A government spokesperson stated: “Tackling the affordability crisis is our priority, which is why we’ve acted quickly to give families immediate breathing space. From January, the majority of low-income households will receive £100 towards their energy costs.”
As the Winter months approach, the structural limitations of support initiatives highlight ongoing challenges in addressing the needs of the most vulnerable households amid rising energy costs.
