The British government announced earlier this year that households will have £400 knocked off their energy bills this winter as part of the effort to tackle soaring bills as the cost of living crisis bites.
The policy was announced by former chancellor Rishi Sunak along with other measures including a £650 one-off payment for around eight million households on means-tested benefits; a £300 one-off payment to over eight million pensioner households to be paid alongside their winter fuel payment; and a £150 one-off payment for around six million people across the UK who receive certain disability benefits.
As a Tory leadership candidate vying to succeed Boris Johnson this summer, Mr Sunak promised further handouts but he was ultimately beaten by Liz Truss, who moved quickly as prime minister to freeze Ofgem’s cap at £2,500 for two years but has yet to promise any further direct payments to citizens.
Having stated her opposition to “handouts” during a campaign interview with The Financial Times, Ms Truss and her new chancellor Kwasi Kwarteng may yet find themselves forced to do more, given that Cornwall Insights analysts have warned that the extent of the energy crisis is such that Ofgem’s cap might have pushed beyond the £6,000-mark by April 2023 had the government not acted.
A miserable winter is still on the cards for millions of households with inflation at a 40-year-high of 9.9 per cent, sending the price of consumer goods and fuel rocketing while wages stagnate.
Here is a look at how people will get the discount they have been promised.
How will the £400 discount be paid?
Households will start receiving money off their energy bills from October, with the discount made in six instalments.
A discount of £66 will be applied to energy bills in October and November, rising to £67 each month from December through to March 2023.
How will I get the discount?
It will be administered by energy suppliers. Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills.
Traditional prepayment meter customers will be provided with energy bill discount vouchers in the first week of each month, issued via text message, email or post, using the customer’s registered contact details. These customers will need to take action to redeem these at their usual top-up point, such as their nearest local PayPoint or Post Office branch.
Smart prepayment meter customers will see the energy bill discount credited directly to their smart prepayment meters in the first week of each month of delivery.
Suppliers will be expected to report to government the action they are taking to ensure the support has been passed on to consumers, including notifying customers in writing they have received the £400 energy bill discount and ensuring it is clearly shown on bills or statements.
Do I need to give my bank details?
No. It is important to bear in mind that scammers may use this as an opportunity to strike – just as they did when financial support was announced early on in the coronavirus pandemic and it prompted a slew of fake rebate emails and texts purporting to be from official bodies.
The government says no household should be asked for bank details at any point. Ministers are urging consumers to stay alert of potential scams and report them to the authorities.
Scam texts, for example, can be reported to 7726 and Ofcom has information about how to do it here.
Will I need to pay the money back?
No, it is non-repayable.
People who are struggling with their energy bills should contact their supplier. Ofgem rules mean suppliers must offer payment plans people can afford and customers can ask for “emergency credit” if they use a prepay meter and cannot top up.
You can find out more information about this and the schemes, grants and benefits available here.
