Cost of living payment 2022: when will £400 energy bills discount be paid, how will it work, who gets support?

Every household in England, Scotland and Wales will receive £400 in energy bill discounts

Every household in England, Scotland and Wales will receive £400 in energy bill discounts later this year, the government has confirmed.

The support will be issued to some 29 million households in six instalments over a period of six months to ensure people have financial support throughout the cold winter months.

The £400 discount is non-repayable and is part of the £37 billion cost of living emergency support scheme set out by ex-Chancellor Rishi Sunak earlier this year to aid households this winter.

Every household in England, Scotland and Wales will receive £400 in energy bill discounts (Photo: Adobe)

It comes as households are facing mounting energy costs, with bills expected to reach almost £5,300 from April next year if wholesale gas and electricity do not fall.

In a new forecast, energy consultancy Auxilione predicted that the price cap on energy bills could reach £3,628 in October, up from £1,971 today. Costs could then rise even further to £4,538 in January and peak at £5,277 in April.

It marks the worst forecast yet as millions of households are set to face crippling bills this winter.

The prediction puts further pressure on politicians to offer more help, with Conservative leadership candidate Rishi Sunak promising on Thursday (11 August) to save all households around £200 by cutting VAT on energy.

He also promised more targeted help for vulnerable households, but said he would confirm how much support when the October price cap is finalised later this month.

Who will get the £400 energy bills discount?

All households in England, Scotland and Wales with a domestic electricity connection are eligible to receive the support.

The government has said there is no need for households to contact energy suppliers concerning this as customers will be automatically eligible.

When will the discount be paid?

The £400 discount will be administered by energy suppliers and paid to consumers over a six month period starting from October 2022.

A discount of £66 applied will be applied to household energy bills in October and November, rising to £67 each month from December through to March 2023.

Households will never be asked for their bank details and those with a domestic electricity connection will not need to apply.

The discount will be issued on a monthly basis regardless of whether consumers pay monthly, quarterly or have an associated payment card.

This means that if a person’s housing circumstances were to change during the six-month period, such as those leaving or moving home, they will still benefit from the relevant portion of the total £400.

This also applies to students and other tenants renting properties with domestic electricity contracts from landlords where fixed energy costs are included in their rental charges. In these circumstances, landlords who resell energy to their tenants should pass the discounted payments on appropriately, in line with Ofgem rules to protect tenants.

How will I receive the payment?

Direct Debit customers will receive the discount automatically as a reduction to the monthly Direct Debit amount collected, or as a refund to their bank account following Direct Debit collection during each month of delivery.

Standard credit customers and payment card customers will see the discount automatically applied as a credit to their account in the first week of each month of delivery, with the credit appearing as it would if they had made a payment

Smart prepayment meter customers will see the discount credited directly to their smart prepayment meters in the first week of each month of delivery.

Traditional prepayment meter customers will be provided with redeemable vouchers or Special Action Messages (SAMs) in the first week of each month, issued via SMS text, email or post. Customers will need to take action to redeem these at their usual top-up point.

In all cases, no household should be asked for bank details at any point. Ministers are urging consumers to stay alert of potential scams and report these to the relevant authorities where they are suspected.

Chancellor Nadhim Zahawi, said: “We know that people are struggling with rising energy prices which is why we have taken action with support over the winter months to help ease the pressure on household budgets.

“This £400 off energy bills is part of our £37 billion of help for households, including 8 million of the most vulnerable households receiving £1,200 of direct support to help with the cost of living.

“We know there are tough times ahead and we will continue to do everything in our power to help people.”

Details of the energy bill discount payment scheme comes as the government launches an online service to help homeowners save money on their energy bills.

The new GOV.UK website, originally available through the Simple Energy Advice (SEA) service, offers a breakdown of support available through various schemes and how much financial support households can receive towards energy improvements.