The government money will be non-repayable and it is designed to help with energy bills.

It is part of a package of support to fight rising fuel bills and eligible households will be able to apply online for the £400 payment.

Anyone who lives in a household which is not connected to the national grid and does not have a relationship with one energy provider, such as a care home, caravan, farm, off-grid home or houseboat will be able to apply for the money.

Around two million households in the UK who use alternative fuels, such as biomass or heating oil, are also being given a £200 payment to help with rising costs. This will be made automatically through their current provider.

‘Updates will help millions worry less about their energy’

The extra money has been announced to fight rising energy bills, which have largely been blamed on the war in Ukraine.

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It comes as part of a package of measures by the government to help struggling households. Energy bills are now at an average of £2,500 and are set to rise to £3,000 in April under the Energy Price Guarantee, although many people will pay more than this.

Business and energy secretary Grant Shapps, said: “Putin’s illegal war has caused global energy prices to soar, but we are continuing to work hard and urgently to get help to households across the UK, and this update provides people with more certainty on when and how we will deliver help with fuel bills.

“We’re already limiting the amount suppliers can charge consumers for their energy through the Energy Price Guarantee, which will continue to help consumers through to March 2024. We’ve all seen and felt the temperature dropping recently, so today’s updates will help millions worry less about their energy and heating bills this winter.”

How to apply for the extra money

The money announced today comes under the Energy Bills Support Scheme (EBSS) Alternative Funding.

Eligible households can go online to a specific page on Gov.uk (which is yet to be announced) from January to apply and there is a phone helpline for anyone that needs it.

Payments will be processed through local authorities and the exact details are expected next month.

The government said the exact date that an eligible household will receive support will depend on when the application is made and when the payment can be processed by the relevant local authority.

Payments for Northern Ireland

Separately payments of £600 have been confirmed for all households in Northern Ireland. These one-off payments will start in January to help with rising bills.

For customers who pay by direct debit, this money will automatically be paid into their bank account. Those who pay via other methods will be sent a voucher to redeem the payment.