BILL CUT
When will my energy bill be cut by £400?
EVERY household in the UK will see £400 slashed off their energy bill, Chancellor Rishi Sunak has confirmed.
The reduction is part of £10billion package of help to get families through the cost of living crisis.
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Households were set to be given a £200 refund on their bills in October - but the idea was widely slated because it was a loan that everyone would have to repay.
Now the help has been DOUBLED to £400 - and households will not have to give the money back.
Speaking in the House of Commons, Rishi said: "We know that people are facing challenges with the cost of living and that is why today I’m stepping in with further support to help with rising energy bills. "
The chancellor has been under pressure to do something to help households facing exponential bill rises.
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Energy bills have soared by 73% over the past 12 months.
A year ago the price cap was £1,138 and today it stands at £1,971 - an increase of £833.
It is expected to hit £2,800 in October - up an eye-watering 146% from this time last year.
Here's what you need to know:
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When will my energy bill be cut?
The government announced help for households back in February, including the £150 council tax energy rebate for four in five households.
It also revealed plans to apply a £200 discount to every energy bill in October.
But this second giveaway was actually planned to be a loan, which households would have to repay in £40 instalments over a five year period.
It was said to be unfair to those who may not benefit from the giveaway now but would have to repay the money in the future - for example, someone living with their parents this year but who moves out next year.
Now Rishi has said he is scrapping the £200 discount and instead offering a £400 grant, which will not have to be repaid.
It will be given automatically to all households in England, Scotland and Wales - you will not have to apply.
Energy suppliers will be tasked with delivering the money to all households with an electricity meter over six months, starting in October.
Direct debit and credit customers will have the money credited to their account.
Households on a pre-payment meter will either have the money applied to their meter or paid via a voucher.
How much will my energy bill be cut by?
Rishi is set to cut bills by £400 - but other help is also being dished out including:
- £650 one-off payment for Universal Credit and benefits
- £300 one-off payment to low-income pensioners
- £150 extra one-off disability payment
- £500million added to the Household Support Fund
The giveaway will be funded, in part, by a windfall tax on energy firms.
Campaigners, politicians and charities have been calling for an extra levy on suppliers as families struggle to pay their bills.
Households have seen their energy bills soar in recent months.
The energy price cap went up by 54% in April, bringing the average household bill to £1,971. It is expected to rocket another 42% to £2,800 in October.
A main reason for the price surge is that wholesale energy costs are going up due to global supply issues and the war in Ukraine.
At the same time, families are enduring rising prices on everything petrol to groceries and more.
But energy providers have seen their profits soar. Shell made a record £7billion in the first three months of 2022 and BP made £5bn, its biggest profit in the last 10 years.
A windfall tax is is a one-off levy placed on companies by the government, designed to get firms to pay more tax if they have benefited from something they weren't responsible for.
In this case, it would target energy suppliers that have recorded sky-high profits.
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Will I have to pay the money back?
A crucial difference between the previously planned £200 energy bill refund, and this new £400 discount is households will not have to pay the money back.
Ministers had also been considering cutting council tax bills — beyond the £150 rebate for bands A to D already announced.
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