The payment will be awarded as part of the Energy Bills Support Scheme later this winter. Earlier today (July 29), the Government confirmed the £400 discount will be paid to customers over six months by energy suppliers. It comes as inflation reaches a 40-year high and energy prices are forecast to rise to £3,500 in October, exacerbating the cost of living crisis.
Starting from October 2022, payments will be sent out to around 29 million households to help with the exponential rise in bills.
Families with a domestic electricity meter point who pay for their energy through a standard credit, payment card and direct debit will get an automatic £400 deduction to their energy bills over six instalments.
Households will see a discount of £66 applied to their energy bills in October and November, and £67 a month from December to March 2023.
Conversely, prepayment meter customers will be given the £400 discount through vouchers in the first week of each month. These will be issued via SMS text, email or post, with customers being reached out to using their registered contact details.
It should be noted that customers will need to redeem these at their usual top-up point, for example at a PayPoint or their local Post Office branch.
As well as this, smart prepayment meter customers will receive the £400 payment directly to their smart prepayment meters in the first week of each month of the cost of living scheme.
Millions of households will get a discount of £66 administered to their energy bills in October and November, rising to £67 each month from December through to March 2023.
The Government’s non-repayable deduction will be given to all claimants on a monthly basis, even if they pay weekly, quarterly or use an associated payment card.
Not one household will be asked for bank details to claim the £400 payment, according to the Government.
As a result of this, politicians are asking consumers to be aware of any potential scams and of fraudsters who are looking to take advantage of this latest support measure.
To mitigate the risk of fraud, energy suppliers will have to report to the Government and confirm the £400 has gone straight to their customers.
Greg Hands, the UK Government’s Energy Minister, emphasised how many people will be assisted thanks to the £400 energy bill grant.
Mr Hands 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.
“Coupled with world-leading action to radically enhance our home-grown energy security, we will continue to be on the side of British consumers now and into the future.”
Nadhim Zahawi, the current Chancellor of the Exchequer, added: “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 £37billion of help for households, including eight 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.”
On the need for the £400 discount, the 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.”