A windfall tax

TUC calls for windfall tax on banks to cut bills as new energy price cap announced

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Published: August 26, 2026
This Article was written by: Katie Hill - My Green Pod
banking, banks, bills, cost of living, energy, energy bills, inequaity, money, tax

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The energy price cap will be announced later today (26 Aug), and the TUC is marking the occasion with a renewed call for a windfall tax on bank profits to pay for a cut to the majority of UK households’ energy bills.

The call comes as new polling – conducted by YouGov for the TUC – shows that in the three months up to late June, more than a third (35%) of adults had cut back on hot water usage for baths and showers at least several times a month to reduce their spending. 15% say they do this on most days. This is despite the fieldwork being completed in warmer months of the year.

To reduce their spending, more than a third (37%) regularly did not use electrical appliances as often as needed, with 15% doing this every day or most days.

The polling also revealed in the last three months before the research (March to June), almost a quarter (23%) refused a meal to save money on a monthly basis, and two in five (40%) avoided putting their heating on at least several times a month.

Almost a quarter (23%) said they have made large or significant cutbacks on food shopping in the last year.

Costs & debt

Many said they were going into debt or dipping into savings to get by. A fifth (20%) said that they had gone into debt once, a couple of times or several times because they had been unable to pay an unexpected bill in the last year, with 15% saying this had happened at least a couple or several of times.

More than a fifth (22%) said that they struggled to meet or could not afford their monthly outgoings.

Half (51%) said they had to use their savings to cover their monthly costs in the last year, with over a quarter (29%) saying this happened regularly (every, most or some months).

A quarter (25%) said they had gone into debt to pay for monthly expenses in the last year, with 14% saying this had happened regularly (every, most or some months).

More than a fifth (21%) said that they hadn’t been able to put any money into savings in the last year.

‘Households up and down the country are already up against it. Too many are skipping meals, dipping into savings and having to cut back on life’s essentials.

‘The government is going to have to keep going on measures to boost living standards – starting with a tax on banks’ enormous profits to cut energy bills for the majority of households.

‘It’s the right thing to do. Banks are raking it in while many up and down the country are struggling to get by – they can well afford to pay more tax.’

PAUL NOWAK
TUC General Secretary

Cost-of-living pressures

The TUC is calling for an increase in the tax on profits of banks to pay for a social tariff and cut bills for the majority of households by up to £559 a year.

The government has been straight out of the blocks with measures to tackle the cost of living, including scrapping VAT on electricity bills.

The TUC says scrapping VAT is welcome and will help to cushion the blow to households – but points to longer term increases in recent years.

Trump’s illegal war has seen households hammered by further jumps in energy bills, and costs have been stubbornly high since Russia’s illegal invasion of Ukraine.

TUC analysis shows that average annual payments for energy bills have gone up by £437 compared with May 2021 – costing households a total of £2,500 in the time since (up to May 2026).

At the same time, bank profits are ‘booming’. The big four banks are making more than £1bn a week, based on the first half of the year.

Banks’ bumper profits

Currently the bank surcharge is an additional 3% corporation tax on the profits of banking companies above £100 million, which was reduced from 8% in April 2023 by the Conservatives – just as bumper profits kicked in alongside higher interest rates.

The TUC is calling for the government to increase the surcharge to raise up to £60 billion over the next four years – and help cover the cost of the social tariff.

A 16% surcharge – which is double what it originally was before the Conservatives cut it – would deliver £24bn over four years.

A 35% surcharge, which would be the same level as the windfall tax the Conservatives imposed on energy companies, would deliver £60bn over four years.

Even the bare minimum of reversing the Tory cuts and setting it at 8% would raise £9bn over four years.