The Chancellor for the UK, Rishi Sunak, recently announced ways in which the government is planning on supporting those struggling with soaring energy bills. However, these schemes will be paid in different ways which has led to some confusion.
Continue reading to find out how you can access this support.
How do I access the £400 discount?
All UK households will be applicable for a grant to reduce energy bills by £400 from October of this year. Mr Sunak has said previously that £200 would be knocked off of everyone’s energy bills – although this would need to be paid back over five years.
The discount has since been doubled to £400 and the requirement to pay it back scrapped. A slight U-turn, but a very welcome one.
The discount will be made automatically by your energy supplier with no need to apply. From October, over a period of six months direct debit and credit customers will have the money credited to their account. Pre-payment customers will have their credit applied to their meter of paid via a voucher.
The grant will apply to households in England, Wales, and Scotland – with the equivalent funds given to Northern Ireland to distribute themselves. It is worth noting that this has not yet been worked out.
Will those on benefits get any extra help?
For those in receipt of benefits, a £650 payment will be made. This is thought to be applicable to more than eight million low-income households who receive Universal Credit, tax credits, pension credit, and other means-tested benefits.
These payments will be made automatically into bank accounts with no need to apply for them. The first instalment will be sent in July and the second some time in Autumn. For those on tax credits, payments will follow shortly afterwards.
Anyone on disability benefits will receive an additional £150 in September due to the likely increased energy use for this demographic. Further to this, anyone receiving the following benefits will be entitled to this payment; Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Scottish Disability Benefits, Armed Forces Independence Payment, Constant Attendance Allowance and War Pension Mobility Supplement.
Is there any help for pensioners with winter fuel bills?
Any households that receive the Winter Fuel Payment of between £200-300 will receive another additional payment of £300 in November/December. This is thought to apply to almost all pensioners across the UK.
Lower-income pensioners that claim pension credit will receive their money in addition to the £650 support for those on benefits, mentioned above. There seems to be a cumulative effect on some of the support payments being given, targeted heavily to those most vulnerable in our society. For pensioners with disabilities – payments could total £1500.
Are there any payments already being received?
Around 80% of UK households are already receiving £150 energy rebates through their council tax bills. This mechanism will differ depending on how exactly you pay your council tax. Some across the country have received their payments by fuel vouchers for example.
An additional £500 million has been added to this fund by the chancellor.
How will the support be paid for?
The government support will most likely be paid for by a windfall tax, a temporary measure, imposed on energy companies. This levy is hoped to raise around £5bn over the next year.
It is somewhat worrying to see the vast profits oil and gas companies are making against the backdrop of an energy crisis. Demand for energy has increased as the world emerges from a pandemic and supply has been struck by Russian aggression in Ukraine. It is likely that we will continue to see generation companies taxed more in the future, which may cover some of the bill for the treasury. How the rest will be made up is unknown.
Will the cost of living continue to rise?
Prices have already hid record rates of growth in the last forty years. Forecasters have said that the rate is set to accelerate and prices will not fall next year and beyond.
The biggest unknown is what will happen to energy bills over the next few years. This is dependent on many factors, but one of the biggest concerns is seeing how the war in Ukraine will effect energy supplies from Russia.
Customer Billing – Will I Be Affected?
As already mentioned, energy costs are spiralling – and the price rises are affecting all of us. For UK energy customers it is difficult to say how your bills will be affected due to the serious volatility in the energy markets. It is important to remember that energy prices as a whole are rising, and this will be passed onto consumers through energy bills, making it something to keep a close eye on.
Different suppliers will feel the pinch in different ways so it is crucial to be aware of the current situation your energy supplier finds themselves in. It is possible to view up to date supplier profiles with any recent changes for all of the energy suppliers in the UK, here.
At a time where bills look set to rise due to market volatility, it is also a good idea to ensure that you are not being overcharged for any of your utilities. It can be a tricky task to navigate but there are free online tools to remove the hassle available.
You can find a free online Gas Bill Calculator to see if you are being overcharged, here.
You can find a free online Electricity Bill Calculator to see if you are being overcharged, here.
Energy Solutions by Us, for You
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