Not everyone will get the £400 energy bill discount announced by Chancellor Rishi Sunak last week. It all depends on how you pay your energy bill, and if you’re the person in charge of sorting your gas and electricity
An energy discount worth £400 will be applied to the gas and electricity bills of households across the country from October.
Around 28million homes across England, Wales and Scotland will receive the new support, confirmed last week by Chancellor Rishi Sunak as part of a new £15billion cost of living package.
But there will be some people that miss out on the help.
For example, if you rent your property and your energy bill is included in your rent, then the money would go to your landlord.
This is because they’re in charge of paying for your gas and electricity.
In theory, the landlord would be expected to pass on this reduction in what they charge you – but there is nothing that can realistically force them to do this.
If you rent but you pay your bills separately, so you only pay rent to your landlord, then the £400 discount will be applied to your account as expected.
Some caravan owners and those who live in a boat will also not get the £400 energy help.
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Most caravan owners pay a fee to the owner of the park, which includes the energy you use.
In this incidence, you wouldn’t directly receive the £400 discount as it would go to the bill payer.
For people living in boats, electricity use is normally included in your docking fee – so you also wouldn’t have the discount applied directly to you.
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Again, the people or companies in charge of paying for the energy use could pass on the discount to customers – but it doesn’t mean they will.
The new £400 energy discount was confirmed as a replacement for the £200 “loan-not-loan” that would’ve need to be paid back starting from 2023.
It will be applied to bills from October, spread out over six months. Rather than a cash payment, the money will be applied directly to your energy account.
Direct debit and credit customers will have the money credited to their account, while those with pre-payment meters will have the money added to their meter or paid via a voucher.
The Government has said equivalent support will be given to people in Northern Ireland.
But the £400 discount is still only half of the £800 the boss of Ofgem warned its price cap will increase to this October – meaning families still face huge increased household costs.
The price cap for those on default tariffs paying by direct debit increased by £693 from £1,277 to £1,971 last month.
Jonathan Brearley, the chief executive of Ofgem, warned this could rise to £2,800 in October.
The price cap covers around 22million households and is linked to wholesale energy costs, which are going up due to global supply issues and the war in Ukraine.