Over 800,000 low-income households are missing out on the Chancellor’s £100 Household Energy Payment. Who are they?

New analysis from Policy In Practice finds that 838,000 households currently claiming Council Tax support will not benefit from the extra support announced by the Chancellor in the budget, despite struggling with the rising cost of energy bills in a larger home. 

Chancellor John Healey has announced that 20 million households in council tax bands A-D in England will receive an extra £100 Household Energy Payment this winter, at a cost of £2.6bn to the exchequer. Yet by the government’s own estimates, this broad support will reach only 88% of households in the bottom three income deciles, and 83% of fuel-stressed households. 

The analysis is based on administrative data in a representative sample of local authorities using the Low Income Family Tracker (LIFT) analytics platform, a tool used by over 130 local authorities across the UK to support low income residents. Tools like LIFT demonstrate that with the right data, councils are able to identify low income families missing out on the payment, to help better target support. 

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. Conducting an analysis of families supported by our partner councils, a low-income family of five or more individuals is 1.6 times more likely to live in a property in band E-H, compared to an average low-income household. This means that over 130,000 larger, low-income households will miss out this winter.

Alongside the £100 Household Energy Payment, the government announced £100 million for councils to target help at those acutely affected by rising energy bills, including households in higher bands that the automatic payment misses.

Policy in Practice has long called for policies that combine both automated schemes with discretionary funding for councils to provide targeted wraparound support. The Government appears to have delivered.

LIFT data shows that 84% of the households missed live with a disabled person, have children or are under the poverty line, and that it is possible to identify these households and target support to them. Reaching these families in need currently set to miss out would cost the government £70 million. 

And this is not the only group likely to miss out on the payment. 

We see councils leading the way by using data to deliver more effective public services. It’s great to see government adopt more of these initiatives into their design and delivery of national policy.

• Direct debit is a barrier. For instance, in 2022, Stratford-on-avon district council reported only 77% of households pay their council tax through a direct debit. Low-income households are more likely to pay by other methods, and some will pay no council tax because of Council Tax Reduction, meaning they must apply manually. As we see time and again, requiring separate applications inevitably results in a large number of households missing out.
• Overdrawn accounts. Many low-income households are overdrawn. For these households, a payment into their bank account will just reduce their overdraft, so the £100 goes towards existing debt rather than towards energy costs. This arguably undermines the scheme’s objective of easing the impact of energy prices and helping households through the winter.

Council Tax band targeting applies solely in England, with Scotland, Wales, and Northern Ireland receiving equivalent funding allocations. We encourage devolved leaders to adopt a more targeted approach so that relief reaches the households most in need.

Identifying who is missing out on this scheme matters, because these households will still face the same pressures this winter. Policy in Practice’s LIFT platform can help councils find these households so that any additional discretionary support can reach them. LIFT brings together the local data councils already hold, so they can see which low-income households fall outside the scheme as being on Bands E-H and contact them directly. Policy in Practice can also help to design and deliver campaigns to those who don’t have a direct debit and help them register for the payment. 

Relying on council tax bands to deliver energy relief ignores the realities of modern poverty. Many low-income families have no choice but to live in larger, higher-band properties—often multigenerational households pooling resources just to get by. Over 130,000 larger low-income families are set to miss out entirely under this policy. It is essential to identify exactly who is being missed and ensure vital energy relief reaches those in genuine need. 

Domenica Avila, Miles Hession, Fran Torres Cortés, Fabian Chessell, and Deven Ghelani at Policy in Practice.

• Policy in Practice’s figures are based on a sample of 550,000 low income households across 37 local authorities and cover a spread of urban and rural geographical areas. To reach a national figure, we applied weighting factors based on publicly available data by the Ministry of Housing, Communities and Local Government (MHCLG) and the Valuation Office Agency (UK) on council bands to deliver national figures for England. 
• Policy in Practice is a social policy, software and analytics company that helps people to discover and access financial support they are missing out on due to a lack of awareness, stigma and the complexity of the application process. 
• It works with over 350 organisations across sectors including over 120 local authorities, as well as utilities, financial services and housing. Together, they help customers understand the support they may be eligible for.
• An estimated £24 billion in benefits goes unclaimed each year. Read: Missing out 2025.
• Its award winning Better Off Calculator is used by thousands of people every day, via GOV.UK and partners, to help eligible users discover nearly £6,000 a year, on average. 
• Spokespeople available for interview: Deven Ghelani, Director and Founder, Policy in Practice.