The £400 energy bill discount for every home explained

Every household across the country will get GBP400 off their energy bills this year as part of a plan to help families through the Cost of Living crisis, it has been confirmed. Chancellor Rishi Sunak has announced the plan as part of a GBP15bn support package, alongside plans to introduce a windfall tax on big energy companies. The new support – available to 28million households – replaces the controversial GBP200 energy discount people were due to receive from October. The GBP200 discount had been much-criticised and labelled as a “loan” as the money would’ve needed to be paid back over 5 years.

This plan has now been scrapped in favour of a higher payment, alongside other support for more vulnerable groups nationwide. This grant will not need to be paid back. READ MORE: Huge illegal waste dump discovered at man’s Lincolnshire home by investigators

How will the GBP400 grant work?

Unlike the GBP200 grant, which would have been loaned to energy companies and then have been required to be paid back to facilitate the reduction, this GBP400 payment will be paid no-strings-attached.

The new GBP400 payment will still be available to every UK household, spread over six months from October. Rather than a cash payment, the money will be applied directly to your energy account. Direct debit and credit customers will have the money credited to their account, while those with pre-payment meters will have the money added to their meter or paid via a voucher.

Despite the increase in assistance for households, it is only expected to equate to half of the expected increase in the energy price cap from October. The Ofgem boss has said the cap is expected to rise to GBP2,800 later this year. Ofgem chief executive Jonathan Brearley told the Business, Energy and Industrial Strategy Committee: “I am afraid to say conditions have worsened in the global gas market since Russia’s invasion of Ukraine.

Gas prices are higher and highly volatile. At times they have now reached over 10 times their normal level. I know this is a very distressing time for customers but I do need to be clear with this committee, with customers and with the government about the likely price implications for October.

“Therefore later today I will be writing to the Chancellor to give him our latest estimates of the price cap uplift.

This is uncertain, we are only part way through the price cap window, but we are expecting a price cap in October in the region of GBP2,800.”

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