The UK Government has issued new guidance on how the £400 Energy Bills Support Scheme (EBSS) will be delivered to people living in park homes, those who do not use gas for heating and tenants who pay for energy as part of their rental agreement.
The Energy Price Guarantee will reduce the unit cost of electricity and gas so that a typical household across the UK pays, on average, around £2,500 a year on their energy bill, for the next two years. The saving will be based on usage, but on average usage a household will save £1,000 a year - based on current prices from October.
However, it’s crucial to be aware that your actual bill and savings could be higher or lower depending on the size of your home, how well it is insulated, how many people live there and how much energy you use.
The newly updated guidance on GOV.UK shares more details on how the Energy Price Guarantee will be applied to households on a standard variable tariff, a fixed-rate tariff or a prepayment meter.
Households in Scotland, England and Wales who pay for their energy through a monthly, quarterly or other regular bill, will have the Energy Price Guarantee applied when your bill is calculated.
The £400 Energy Bills Support Scheme started this month and will see all domestic electricity customers receive a £66 off their monthly bill. Prepayment customers will either have this added to their Smart meter or sent out as vouchers by email, text or post for people using a traditional prepayment meter.
Nobody will be asked to apply for this discount, it is automatic so if you receive a text, email or phone call telling you otherwise it is a scam.
If you are on a standard variable tariff
The average unit price for dual fuel customers on standard variable tariffs, subject to Ofgem’s price cap, paying by direct debit will be limited to 34.0p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from October 1, 2022.
These are average unit prices, the unit rate itself varies by regions and the full list of rates have been passed to suppliers to ensure that they are used to calculate bills in the UK from the start of October. See the full list of regional rates here.
Energy suppliers will adjust standard variable tariffs automatically - customers on standard variable tariffs do not need to take any action to get the benefits of this scheme.
The Energy Bills Support Scheme will also be applied as a discount on your monthly bill, totalling £400 from October to March.
If you are on a variable tariff not subject to the price cap
Variable tariffs which were not subject to Ofgem’s price cap (which are known as having a derogation), for instance certain 100% renewable energy tariffs, will receive the full unit rate discount: reductions of 17p/kWh for electricity and 4.2p/kWh for gas.
If originally priced at a higher level than Ofgem’s price cap, then the resulting unit rates will be above the standard variable EPG unit rates.
The Energy Bills Support Scheme will also be applied as a discount on your monthly bill, totalling £400 from October to March.
If you are on a pre-payment meter
For pre-payment meter customers, the UK Government will make sure you receive the full benefit of both the Energy Price Guarantee and the £400 Energy Bills Support Scheme.
The Energy Price Guarantee will be applied to the rate you pay for each unit of energy, so the money you put on the meter will last longer than would otherwise have been the case this winter.
There’s no need to apply and you won’t need any vouchers - the discount will be applied automatically by your supplier.
As is the case with the price cap, under the Energy Price Guarantee there will continue to be a small difference between the unit cost for a pre-payment meter customer and other bill payers.
If you are on a prepayment meter, you will also receive the £400 Energy Bills Support Scheme. These payments will be made monthly from October to March, totalling £400 overall.
You will receive the Energy Bills Support Scheme discount from the first week of each month. Smart meters will be credited automatically. If you have a traditional prepayment meter you will get the discount automatically in one of the following ways, as:
- redeemable vouchers, sent by SMS text, email or post
- an automatic credit when you top up at your usual top up point
Your electricity supplier will let you know in advance how you will get your discount. They should have your contact details, but if you’re not sure or you don’t receive any information from them, you should check that they have your latest number and email.
If you get vouchers you will need to redeem them at a top-up point. Your supplier will tell you where to redeem them, for example at a Post Office branch or a PayPoint shop - Payzone outlets are unable to accept the vouchers.
If you’re on a fixed rate tariff
Fixed tariff customers will have the same support where appropriate. Unit price reductions of up to 17p/kWh for electricity and 4.2p/kWh for gas will apply to fixed tariff customers that currently have unit rates above the EPG.
A ‘floor’ unit price for gas averaging at 10.3p/kWh and for electricity averaging at 34p/kWh for direct debit customers will be introduced, because some people will have fixed at much lower prices some time ago, meaning their annual payments will already be below the £2,500 average set by the Energy Price Guarantee.
Customers on fixed rate tariffs that are already below the floor unit prices will continue to enjoy those low rates, but will not receive a further discount for the duration of their fixed term.
For the small number of consumers who fixed at a high rate exceeding the October Ofgem price cap of £3,549, they will receive the full discount of 17p for electricity and 4.2p for gas. However, given the higher starting point, their fixed rate tariff will still have a unit rate that is above the EPG rates.
Energy suppliers will adjust fixed tariffs automatically. Customers on fixed tariffs do not need to take any action to get the benefits of this scheme - any transfer to a different tariff is a matter for suppliers.
The Energy Bills Support Scheme will be paid on top of this as a monthly discount to your bill, totalling £400 from October to March.
For full details on the Energy Price Guarantee, visit the GOV.UK website here.
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