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How and when will you get the £400 energy bill discount?

Paloma Kubiak
Written By:
Paloma Kubiak

The government has today set out further details of the £400 energy bill discount for nearly 30 million households this winter. Here’s what you need to know.

In May the government announced every household in Britain would receive a non-repayable £400 energy bill discount from October amid soaring prices. It replaced the previously announced £200 energy rebate which would need to be repaid by households.

The £400 Energy Bill Support Scheme will help around 29 million households across Britain and forms part of the government’s £37bn cost of living package to help as wholesale gas prices have quadrupled in a year.

Here’s what you need to know…

Who’s eligible?

Every household with a domestic electricity connection in England, Scotland and Wales will get the £400 discount. The government said it is “urgently working” to ensure households in Northern Ireland receive the equivalent of this support “as soon as possible”.

For the 1% of UK households currently ineligible because they don’t have a domestic electricity meter or a direct relationship with an electricity supplier – those who live in a park home, houseboat or off-grid – the government said it will announce an equivalent support scheme in the Autumn.

Do I need to contact my energy supplier?

No, there’s no need to contact your energy supplier about the discount. Your energy supplier will handle the discount.

When will it be paid?

From October, households will receive the £400 discount which will be made in six lots of monthly instalments. Exactly how you will get the discount depends on how you pay your energy bills.

Standard credit, payment card and direct debit customers

For direct debit customers, the discount will be an automatic reduction to the monthly amount collected, or as a refund to your bank account if the direct debit has already been collected. The government said it will be clearly shown on bills, whether it’s a paper or online statement.

It will be applied monthly, whether you pay monthly, quarterly or have an associated payment card.

For standard credit customers and payment card customers, the discount will be automatically applied as a credit in the first week of each month, with the credit appearing as it would if payment had been made.

The automatic deduction covers the six months over winter and will be broken down into a £66 discount applied to bills in October and November, rising to £67 each month from December through to March 2023.

The government said this means that if someone leaves or moves home, they will still benefit from the “relevant portion of the total £400”. This is because there are “multiple qualifying dates” i.e six in total, and the discount is applied by meter point so it doesn’t matter if you switch suppliers during this time either.

Prepayment and smart prepayment meter customers

If you top up a meter, you will receive discount vouchers in the first week of each month, issued via text message, email or post, using the registered contact details. The vouchers can then be redeemed at the usual top-up point, such as PayPoint or the Post Office.

Therefore, it’s important your supplier has up-to-date contact details so you receive your voucher and know how to redeem them.

For smart prepayment meter customers, the discount will be credited directly to the smart prepayment meter in the first week of each month in the six-month period.

I rent a property, how will I get the £400 energy bill discount?

Where fixed energy costs are included in rental charges and so the landlord resells energy to a tenant, the government is clear that they should pass the discount on to tenants.

If you have a tenancy which is all inclusive so covers bills, landlords should also pass on the discount. There are rules from regulator Ofgem to protect tenants and ensure they receive the benefits of the energy discount. The government added it will consult on prices and protections for domestic customers whose energy supply isn’t protected by the price cap, including those who pay via all inclusive rents.

Other points to note:

I’m in arrears, what happens here? The government said it expects and encourages suppliers to make it their priority to work actively to move customers with large arrears balances onto repayment plans wherever possible. This is already a licence condition for suppliers.

What if my energy supplier goes bust? The government said where energy suppliers fail, customers won’t be penalised.

I’m a second homeowner, can I donate the £400? Second homeowners will be eligible for the discount and the government said if it took action on second homes, it could risk the start date for delivering the scheme as a whole for winter and any delay would further disadvantage those experiencing high energy bills, particularly those on lower incomes. By removing the discount to those with multiple meters, the government said it would also stop people receiving it who pay on behalf of elderly or disabled people.

Once the discount has been received, “it is for individual households to decide if they do not wish to retain it”, the government said. It added: “Any charitable donation is an individual’s choice from their own assets.”

Don’t share bank details: You will never be asked for your bank details at any point to receive the £400 energy discount. If you are, it’s likely a scam.

Business and energy secretary, Kwasi Kwarteng, said: “People across the country are understandably worried about the global rise in energy costs, and the pressure this is placing on everyday bills.

“While no government can control global gas prices, we have a responsibility to step in where we can and this significant £400 discount on energy bills we’re providing will go some way to help millions of families over the colder months.”