In April, energy bills increased by around 50% for millions of households in Great Britain. The average home is now paying an extra £700 for their energy each year.
With bills expected to increase again in October, the UK Government is offering households in Great Britain a £400 discount on their electricity bills, as part of a package of support to help people deal with rising energy costs.
The grant is known as the Energy Bills Support Scheme and it will not need to be repaid. Here’s everything you need to know about how it will work.
Who will get the £400 discount?
Every household with a domestic connection to the electricity grid in England, Scotland and Wales is eligible for the £400 discount.
The UK Government is working to ensure that people in Northern Ireland receive the equivalent support as soon as possible.
How will I get the discount?
You don’t need to apply for the discount. It will be paid out by electricity suppliers to consumers over six months, with the first payments starting in October 2022.
In October and November, households will get a discount of £66 per month on their energy bills, rising to £67 each month from December through to March 2023.
Every household will get the discount each month, regardless of how you pay for your energy (ie by direct debit or pre-payment meter).
Do I need to contact my energy supplier for the discount?
No, you don’t need to contact your supplier, as all households with a domestic electricity connection will be automatically given the discount.
However, if you haven’t received the first instalment by the end of October 2022, you should get in touch with your energy supplier.
You will never be asked for your bank details.
How will the £400 discount be paid?
You can find more details about how the discount will be paid to you, depending on how you currently pay for your energy:
If you pay for your energy via direct debit, you’ll automatically receive a reduction to the amount that’s collected by your monthly direct debit, or as a refund to your bank account after the direct debit has gone out. This will happen once a month over the six-month payment period.
If you pay using standard credit or a payment card, the discount will be applied automatically as a credit to your account in the first week of each month. The credit will appear in your account as it would if you had made the payment.
If you pay via a smart prepayment meter, you’ll see the discount credited directly to your smart prepayment meter in the first week of each month.
Those paying by traditional prepayment meters will receive redeemable vouchers or Special Action Messages (SAMs) in the first week of each month. These will be sent out to you via SMS text message, email or post. You’ll then be able to redeem these vouchers at your usual top-up point.
Is it a loan that I have to pay back?
The £400 is a grant, not a loan, so will not need to be repaid.
Will I get the discount if I live in a park home, houseboat or live off the grid?
The government estimates that around 1% of households in the UK are ineligible to receive the £400 discount, as they don’t have a domestic electricity meter or a direct relationship with an electricity supplier.
Further funding will be available to provide equivalent support for these households. Details of how and when they can access support will be announced later this year.
What happens if I change my payment method or tariff, or if my supplier goes bust?
Households will get the discount every month, regardless of their supplier, payment method or tariff.
If you switch payment methods during the period, or if your energy supplier goes, bust, you won’t be penalised.
What happens if I move house or switch energy supplier?
All energy suppliers will apply the £400 reduction to bills from October. It won’t matter if you switch supplier.
The discount will be provided through six monthly payments based on six dates across the period. This means that new eligible households will benefit from the relevant portion of the total £400, as there are multiple qualifying dates to base the payments on.
The £400 doesn’t cover the whole increase. Where can I get more help to pay my energy bills?
While the £400 discount will help cover some of the increase, we know that many people will struggle to pay their energy bills given the steep price rises.
All households with a domestic electricity connection will automatically get the £400 discount in monthly instalments from October.
The government has not offered an opt-out option and has said that it’s up to individual households to decide if they don’t want to keep the £400. It’s up to individuals to decide whether they’d prefer to donate the discount to charity.