Over the past year, global energy prices have soared, leading to an unprecedented rise in household energy bills. This—alongside the current record-high inflation rate—is hitting UK households hard. In fact, over 75% of adults are worried about the rising cost of living, according to the Office for National Statistics. Furthermore, a recent government survey found that 58% are more concerned about energy bills than any other bill.
To help with energy costs, the government is delivering a £400 non-repayable discount to eligible households, called the Energy Bills Support Scheme. This article outlines the scheme, so you know what to expect.
Who Is Eligible for the Energy Bills Support Scheme?
All households with a domestic electricity connection in England, Scotland and Wales are eligible for the £400 discount. Currently, no scheme has been established for residents of Northern Ireland, but the government is working hard to ensure equivalent support is available soon.
When Will It Be Paid?
The discount will be granted automatically and administered by energy suppliers; there’s no need to contact your bill provider. It will be paid over six months—a discount of £66 will be applied to your energy bill in October and November 2022, rising to £67 each month from December 2022 to March 2023. The discount will be paid monthly, regardless of when you usually pay your bills.
As the discount is automatically applied, you won’t be asked for bank details. Therefore, if anyone asks you for personal information in relation to the Energy Bills Support Scheme, it’s likely to be a scam. Report any suspected fraudulent activity to Action Fraud.
How Will It Be Paid?
How you’ll receive the discount depends on how you currently pay your energy bill and what kind of electricity meter you have:
- Direct debit customers will receive the discount automatically through a reduction in the monthly direct debit amount collected.
- Standard credit customers, payment card customers and smart prepayment meter customers will see the discount automatically applied as a credit in the first week of each month.
- Customers with “non-smart” prepayment meters will receive vouchers—issued by text, email or post—in the first week of each month. Vouchers can be redeemed at a customer’s normal top-up point.
- Tenants who rent properties with included energy bills should have the discount passed down by the landlord, in line with Ofgem rules to protect tenants.
Who Is Ineligible?
Those without a domestic electricity meter and a direct relationship with an electricity supplier (eg houseboats and park home residents) are currently ineligible for the discount. This makes up about 1% of households. Equivalent funding will be available for these households, with an announcement expected in autumn.
Other Support Available
The Energy Bills Support Scheme is just one part of the government’s wider cost-of-living support, Help for Households. Other support includes a £650 one-off payment for certain households on means-tested benefits.
Additionally, energy suppliers are obliged to offer payment plans that consumers can afford. Therefore, if you’re struggling to pay your energy bills, speak to your supplier about arranging a manageable repayment plan.
Conclusion
With energy bills rising at unprecedented levels, many households will feel the pinch this winter. In response, the government’s Energy Bills Support Scheme will deliver an energy bill discount to around 29 million households, starting from October. Visit the government website for further information on the scheme. For additional financial well-being resources, contact us today.