The Government has confirmed that VAT on domestic electricity will be scrapped from 1 October 2026. A typical household should save around £45 a year, which is welcome news as the colder months approach.
A boost for the high street?
Lower household bills could leave families with a little extra cash to spend. We reckon that might give small retailers, cafés and local services a gentle lift during the busy Christmas period. As one observer put it: "A small reduction in household energy costs may provide a welcome boost to consumer spending, particularly during the traditionally busy Christmas trading period."
Time to review your own energy deal
While the change is aimed at homes, it highlights how different the rules are for businesses. If you're on a business energy tariff or simply want to check your current home deal, now is a good moment to compare rates and see if you can lock in better value.
Other energy stories worth watching
- North Sea drilling: More UK production is being discussed, but experts say it is unlikely to cut bills because prices are set on global markets.
- Middle East tensions: Disruptions around the Strait of Hormuz have already pushed oil prices above $90 a barrel, which could feed through to higher costs for transport and manufacturing.
We’ll keep an eye on how these developments affect everyday energy prices and let you know if switching could help.
