Every domestic electricity customer across the country will receive a £400 discount off their energy bill from October in a new effort by the UK Government to help millions of households cope with the cost of living crisis. The money does not have to be repaid and energy suppliers will deliver this support over six months from October.
However, not everyone will receive the extra financial help to tackle the next Ofgem price cap rise, which Cornwall Insight now predicts will increase by 64 per cent from October 1, taking the annual cost for a typical user on a standard tariff to £3,245. The energy analysts also said the price cap could go up by a further £360 in January to £3,364.
Energy Minister, Greg Hands explained earlier this week that households without a domestic electricity supply contract are not eligible for the scheme. However, he said: “The [UK] Government is exploring options for other ways in which they might receive similar support.”
One such category is those in rented or supported accommodation who pay their utility bills directly to their landlord, the £400 would go directly to the landlord or energy bill payer.
However, Mr Hands said that landlords “should consider passing on the grant payments to tenants”.
He explained: “Landlords with a domestic electricity connection who charge ‘all inclusive’ rent, where a fixed cost for energy costs are included in their rental charges, should consider passing on the grant payments to tenants.
“Landlords who resell the electricity to their tenants based on energy usage may be required to comply with the maximum resale price rules.”
Below is everything you need to know about the £400 energy grant, full details can be found on the GOV.UK website here.
What is the Energy Bills Support Scheme?
The UK Government is providing a package of support worth £37 billion in 2022 to 2023 which includes the Energy Bills Support Scheme.
Through the scheme, domestic electricity customers in the UK will receive a £400 reduction in their electricity costs from this October.
The guidance on GOV.UK states that this will not need to be repaid.
Will I be eligible for the Energy Bills Support Scheme?
All households with a domestic electricity connection will be automatically eligible for the £400 grant.
There is no need to contact energy suppliers concerning this at this point.
Do I need to apply for the £400 support scheme?
No.
The guidance states: "Households will not need to apply for the Scheme, and in most cases we expect electricity suppliers to apply the reduction automatically to bills from October 2022.
"We are working hard to design the delivery of this and there may be some variations in how consumers receive the benefit, depending on how they pay for their energy, for example whether by direct debit or through a prepayment meter. However, all households with a domestic electricity meter should receive the £400 reduction."
Is the £400 a loan?
No - this is a grant and will not need to repaid.
The earlier policy to recoup the payment has been cancelled following a further analysis of the sustained high energy prices and input received. by spreading some of the costs over a few years, so they are more manageable for households.
When will more clarity on the design and delivery of the £200 credit be available?
The UK Government explained: “We are working on the specifics of delivery and are actively engaging with energy suppliers, consumer groups and Ofgem to ensure that delivering this grant is as simple and efficient as possible.
"A consultation on the Scheme concluded on May 23. Responses are being analysed and the government response will be published later in the summer."
Is the scheme UK-wide?
The payment through energy bills will apply across Scotland, England and Wales. Energy policy is devolved in Northern Ireland.
The Northern Ireland Executive will be funded to provide comparable support with around £150 million through the Barnett formula in the financial year 2022 to 2023.
I am on a non-smart pre-payment meter, will I get the £400?
Yes.
Previous schemes have used vouchers to reach those on prepayment meters and the UK Government will ensure that households whose energy is managed in this way will receive the grant.
If I live in a park/mobile home, will I get the £400? Or if I pay for energy in my rent, how do I make sure my landlord passes on the reduction?
The UK Government said: “We recognise that there are certain situations where a third party will be responsible for the bill (and be named on it). In these situations, any charges should then be passed onto the end user, typically through all-inclusive rent (landlord or tenant) or ‘pitch’ charges (for example park homes).
"We are exploring this issue as we continue to develop the policy and we have gathered more evidence through the consultation."
What if I change payment method or tariff, or if my energy supplier goes bust?
The UK Government said: "We are still designing the scheme but will ensure that customers who switch payment methods, or whose energy suppliers fail, will not be penalised."
What if I move house or switch supplier?
All suppliers will be applying the reduction to bills from October 2022.
Why does the support not fully cover the increased cost of the energy price cap?
This scheme will help over 28 million households with the increased costs of global energy prices.
When will we be informed on the final details and design of the scheme?
The guidance states: "The fundamental elements of the Scheme are fixed, and we are now working to design the detail of implementation and delivery.
"The UK Government response to its recent consultation on the scheme is expected to be published in the Summer."
Read the full Energy Bills Support Scheme explainer on the GOV.UK website, here.
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