Budget 2026: What to expect if you’re struggling with household bills

While nothing is confirmed (we’ll need to wait for the Budget on October 28 for the announcements), help with the cost of living is likely to feature in some way or other as UK households continue to struggle with rising prices.

So, the good news is, if you’re finding it harder to cover the cost of energy, petrol, rent and other essentials, the Budget may bring some welcome relief.

However, the bad news is that while the Chancellor John Healey is under pressure to ease cost of living pressures, he also faces increasingly tight public finances. So whatever he offers is likely to be limited – and probably not enough for many struggling households.

What could change on October 28

1. Targeted support for energy bills

One of the most strongly suggested ideas is that the government is considering increasing the Warm Home Discount from £150 to £250.

The scheme currently provides eligible households with a £150 discount on their electricity bills. It is aimed at people on certain benefits and other low-income qualifying households, so doesn’t get given to everyone.

The Chancellor is reportedly considering adding £100 to the discount, funded through general taxation. The proposal could cost around £600 million and benefit approximately six million households. However, if you don’t qualify, it obviously won’t be of help.

Likelihood: High

2. Universal support for energy bills

So, what about help with the cost of energy bills for every household? That would certainly be welcome given that many working families who don’t qualify for the Warm Home Discount are struggling nonetheless, and things are about to get tougher thanks to the a rise in the cap on energy prices due in January. The Ofgem cap currently puts the typical bill at around £1,723 a year. However, forecasters expect that to rise to £1,999 from January 2027. So more households are going to be feeling a more painful pinch during these coming cold, winter months.

However, blanket support is enormously expensive, and some of it goes to households who could manage perfectly well without it, so the Chancellor is very unlikely to approve such a measure.

Likelihood: Low

That said, Energy Secretary Miatta Fahnbulleh is pushing for more ambitious, sweeping changes to energy cost reform. One proposal is to remove renewable-energy levies from household bills and pay for them through general taxation instead. These levies help fund renewable energy and energy-efficiency schemes. Moving the costs away from bills could reduce what households pay directly for electricity.

The Guardian has reported that the change could save households up to around £120 a year, although the exact saving would depend on the final design. The measure could cost the government as much as £3.2 billion.

The difficulty is that the Chancellor is reportedly reluctant to commit to such a costly measure, preferring more targeted support for those receiving means-tested benefits.

3. New energy tariffs for people on lower incomes

Two other ideas are being discussed as part of longer-term energy reform.

The first is a social tariff, under which eligible low-income households would pay less for each unit of energy they use.
The second is a rising block tariff. This would give households a cheaper rate for an essential amount of energy, with higher prices applying once usage passes a set level.

The aim would be to protect households that struggle to afford the energy they need, rather than simply giving everyone the same discount.

But both proposals would require detailed decisions about eligibility, energy usage and how suppliers would operate the schemes. A social tariff would also require coordination between government departments and energy companies, meaning even if the Chancellor is keen, it’s unlikely to be announced this Autumn.

Likelihood: Low for this Budget

4. A delay to planned fuel duty increases

The Chancellor has indicated that he is listening to concerns about rising fuel prices. This has fuelled (pardon the pun) expectations that he could delay a planned increase in fuel duty.

The current plan is for fuel duty to rise by 3p per litre from January 2027, with the remaining temporary 5p cut due to be withdrawn in stages by March 2027.

Fuel duty is the tax charged on each litre of petrol or diesel. It has been frozen for many years, and the temporary 5p cut was introduced in 2022 when fuel prices surged. Keeping the current rates for longer would mean drivers avoid at least some of the planned increase. But it would also leave the government with less tax revenue, which means the Chancellor would have to make up this loss in revenue somewhere else.

If you drive regularly, a delay could help limit the cost of filling your tank, although the benefit would depend on how much fuel you use and how long the freeze lasts.

It is also not guaranteed that lower fuel duty would translate into an identical fall in pump prices, because petrol and diesel prices also depend on wholesale oil prices, the value of the pound, and retailers’ margins – all of which fall outside of the Chancellor’s control.

Likelihood: Medium to high

5. Extra help with rent and other essential costs

The Resolution Foundation, a respected living-standards think tank, has warned that many low-income households are already falling behind on priority bills. It has called for temporary energy support for lower-income families and better help for renters.

One recommendation is to permanently relink Local Housing Allowance — the benefit used to calculate housing support for many private renters — to the 30th percentile of local rents.

This would mean housing support reflected local rents more closely. The Resolution Foundation estimates that a family renting a typical two-bedroom home faces a shortfall of nearly £160 a month because support has not kept pace with rent increases.
The think tank has also suggested topping up the Crisis and Resilience Fund if a new energy discount cannot be delivered in time. This fund helps people facing financial hardship with essential costs.

These are recommendations from the Resolution Foundation, not confirmed government plans. And it’s important to remember that the Chancellor has limited room for new spending, so any additional support is likely to be targeted.

Likelihood: Low to medium for a new measure at this Budget

What you can do now

You don’t need to wait for the Budget to take steps if you’re struggling with household bills.

• Check energy support: See whether you qualify for the Warm Home Discount or other help with your bills.
• Contact your energy supplier if you’re struggling: Ask what support or repayment arrangements it can offer.
• Check council support: Your local authority may be able to help with essential costs.
• Review your spending: If you drive, for example, consider whether you can reduce unnecessary journeys while prices remain high. Are there any subscriptions you could do without for the time being? If food costs are crippling you, could you switch to a lower-cost supermarket, make substitutes from branded to unbranded items, or batch cook more often.
• Check benefit entitlement: if your income has fallen or your circumstances have changed, you may qualify for help you aren’t currently receiving.

The bottom line

The Budget could bring some relief, particularly for eligible households facing high energy bills. However, the most likely measures being discussed are limited in scope and many of the wider proposals remain uncertain, so it is best to plan around the support already available and treat any new announcement as a potential bonus.

Sources

https://www.resolutionfoundation.org/publications/hitting-the-buffers/
https://www.theguardian.com/money/2026/oct/06/chancellor-plans-major-intervention-to-help-poorer-uk-households-with-rising-energy-bills
https://www.gov.uk/the-warm-home-discount-scheme/if-you-live-in-england-and-wales
https://neweconomics.org