What is the council tax rebate? Which bands will get energy bill rebates with Rishi Sunak to announce measures

Millions of households are set to receive council tax rebates as Rishi Sunak unveiled a package of measures to help with the cost of living crisis and rising energy bills later today.

Council tax rebates will to be paid out to millions as families across the UK struggling with skyrocketing energy bills and the ongoing cost of living crisis.

Chancellor Rishi Sunak announced people in Council Tax bands A to D will receive rebates of £150, funded through Government grants.

Mr Sunak made the announcement in the Commons at 11am and will host a Downing Street press conference this afternoon.

More from Money

Which Council Tax bands will be given rebates and who will benefit?

The rebates will benefit millions of households within the A to D bands, as families grapple with rising bills.

But it could inadvertently benefit wealthy households in London and the South East, as council tax bands are based off a property’s house value in 1991.

If the property was worth up to £40,000 in that year, it falls into Band A; properties that were worth £40,001 to £52,000 are in Band B; those valued between £58,001 and £68,000 are in Band C; and properties valued between £68,001 and £88,000 are in Band D.

Constituents living in “Red Wall” seats which the Tories won from Labour in the 2019 election are also likely to benefit the most from the policy.

What did Rishi Sunak unveil today?

Mr Sunak is unveiling the package of measures as Britons brace for the cost of living squeeze to hit hardest in the spring with rising energy and food bills and National Insurance hikes.

Ofgem, the energy regulator, announced a rise in the energy price cap today, which limits what can be charged to customers on a variable dual-fuel rate for typical usage of gas and electricity for a six-month period.

The price cap will increase by £693 from April 2021.

those on default tariffs paying by direct debit will see a rise from  £1,277 to £1,971 per year.

Prepayment customers will see an increase of £708 from £1,309 to £2,017. 

Additionally, the Chancellor unveiled plans for billions of pounds in state-backed loans for all households to be given a one-off discount of £200 on their electricity bills, which will be repaid in £40 instalments over the following five years.

Dubbed the “rebate and clawback” scheme, taxpayers will be underwriting loans to energy providers and while the Government plans to help consumers, it acknowledged that energy bills will still rise significantly for many.