The government unveiled Budget 2026 measures that include a one‑off £100 energy payment for millions of households and an increase in the tax on banks, set against a stark assessment from the independent fiscal watchdog on slow household income growth.
Energy support and standing charges
The Budget confirmed a targeted £100 payment intended to ease household energy costs. The chancellor also said he had acted to remove standing charges from gas bills and expressed a desire to remove similar standing charges from electricity bills as well, though he acknowledged that doing so for electricity would be more complex and would take longer to implement. Personal finance broadcaster Martin Lewis said he had met the chancellor, who told him: "The chancellor said he will be talking to Ofgem about how they get rid of the charge on electricity as well, but that is ‘trickier’ apparently and will take longer."
Banking tax increase
Among the fiscal changes set out in the Budget was a rise in the tax rate applied to banks. The measure is intended to raise additional revenue from the financial sector, though the government framed it alongside steps aimed at supporting households facing elevated energy costs.
Watchdog warns on living standards
The Office for Budget Responsibility (OBR) published a bleak projection alongside the Budget, concluding that living standards are expected to rise by only 1% over the entire post‑Covid decade. The OBR's assessment highlights the squeeze on real incomes and frames the chancellor's package as modest in the context of prolonged economic pressure on households.
Context and next steps
Officials said further details and timings for the energy standing charge changes, particularly for electricity, will require discussions with the energy regulator, Ofgem, and additional implementation work. The Budget also included a summary of key measures and fiscal forecasts intended to set out the government's priorities ahead of the coming months; the OBR's warning is likely to shape political debate over whether the measures go far enough to boost living standards.