Details of £400 energy bill discount for EVERY UK household finally revealed – but there’s a catch

File photo dated 08/02/07 of a gas hob with a bill from British Gas. British Gas owner Centrica's half-year profit has soared five-fold to ¿1.3 billion after being boosted by rocketing energy prices that are battering households. Issue date: Thursday July 28, 2022. PA Photo. See PA story CITY Centrica. Photo credit should read: Owen Humphreys/PA Wire

MILLIONS of households across England, Scotland and Wales will receive a £400 discount off their energy bills from October.

Over 29 million households will be eligible for the discount which will be automatically taken off their energy bills – but not in a way people expected.

It comes as the energy price cap is now predicted to hit £3,500 in October.

The discount will be worth £400 and was previously announced in the former Chancellor’s mini cost of living budget in May.

It’s up to energy firms to administer and distribute the discount directly to their customers.

The Department for Business, Energy and Industrial Strategy has today confirmed that payments will begin being dished out in October.

However, if you think you’ll be handed a single one-off discount worth £400 – think again.

Instead, energy suppliers have been instructed to pay households the discount in six instalments.

This means households will see a discount of £66 applied to their energy bills in October and November, rising to £67 each month from December through to March 2023.

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

But with the energy price cap set to hit £3,500 – working out at roughly £291 a month over the next year – a single payment worth less than £70 a month will hardly touch the sides.

Most households that have a standard domestic electricity meter and pay their energy via standard credit, payment card and direct debit will receive the automatic deduction to their bills.

Those using a traditional prepayment meter will have to take action to get the cash.

They’ll need to redeem discount vouchers sent by their energy firm at their usual top-up point.

You won’t be asked to provide your 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.

Greg Hands energy minister said: “Today we have set out how the government will deliver discounts to help 29 million households with their energy bills this winter.

“I encourage families across the country to engage with these plans and particularly those customers on traditional prepayment meters who need to take action.”

I have a standard electricity meter, how will I get the payment?

Direct debit customers will receive the energy bill discount in one of two ways.

You will either get an automatic deduction to your monthly direct debit, or you’ll get a refund into your bank account AFTER your direct debit has been taken each month.

If you pay by credit (which means you get a bill through and then make a payment) the discount will be automatically applied as a credit on your account in the first week of each month.

I’m on a prepayment meter, how will I get the discount?

If you’re on a smart prepayment meter, the discount will be credited directly to your meter in the first week of each month of delivery – you won’t need to do anything.

If you’re on a traditional prepayment meter, you’ll be given a redeemable energy bill discount voucher or special action message (SAMs) in the first week of each month, issued via SMS text, email or post.

Customers will then need to redeem these at their usual top-up point.

I don’t have a direct relationship with an energy provider?

The government has confirmed today that further funding will be available to provide equivalent support of £400 for energy bills for the 1% of households who will not be reached through the energy bill support scheme.

This includes those who do not have a domestic electricity meter or a direct relationship with an energy supplier, such as park home residents.

An announcement with details on how and when these households across Great Britain can access this support will be made this Autumn.

Cost of living payments: what you need to know

  • All the key dates for cost of living payments revealed
  • Every household will get a £400 cost of living payment to help with energy bills
  • See the full list of benefits eligible for £650 cost of living cash
  • Here’s free cash you can get if you DON’T qualify for the £650 cost of living payment
  • Millions of pensioners will get a £300 cost of living payment this winter
  • Disabled Brits will get £150 this September
  • Parents can get up to £200 towards school uniform costs