Octopus Energy confirms new £40million support package and payment holidays for customers

Octopus Energy has announced a £40million support package to help customers during the cost of living crisis.

The energy firm has confirmed it will offer standing charge reductions to all households on its Flexible Octopus tariff.

All customers on this standard variable tariff will automatically receive a 4% discount in standing charges compared to to the Ofgem price cap.

A standing charge is the daily amount that you must pay, despite the amount of energy you use, to be connected to the grid.

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Octopus Energy are taking a stand against rising energy costs (SOPA Images/LightRocket via Getty Images)

In addition, up to 100,000 customers in greatest need will be able to apply for "standing charge holidays" of up to six months.

Details on how to apply are yet to be released, but households on a low income will be eligible and could go several months without needing to pay a standing charge, depending on their circumstances.

The application process is expected to look at evident financial struggle, so those on benefits may stand a higher chance of being accepted.

CEO and Founder of Octopus Energy, Greg Jackson, said: “High standing charges are egregious. This £40million package is the beginning of our battle to bring them down.

“Far too many costs have been loaded onto standing charges - from grid and distribution charges to failed suppliers.

“These charges just make it more difficult for hard-pressed customers to save money through efficiency and Octopus is making a stand to change that.”

Standing charge reductions will save customers roughly £12 per year (Bloomberg via Getty Images)

Octopus’ standing charge support comes on top of huge Government support for unit rates.

PM Liz Truss ' flagship energy plan will see a price freeze that caps energy bills at £2,500 for two years.

But Truss’ Energy Price Guarantee is based on unit prices, so the more energy you use, the more you will pay - meaning your bill could exceed the £2,500.

The Government's promise for a £400 rebate to reduce every households energy bill this winter will still go ahead.

For Octopus Energy, this means customers will get a direct debit reduction, which will see an automatic monthly credit of £66 in October and November, and then £67 from December to March.

And for smart prepayment customers, the discount will be added directly onto their meter as a credit.

Are you still worried about rising energy bills? Let us know: mirror.money.saving@mirror.co.uk