Explainer: How will the UK £400 energy bills discount work?

UK households are to receive a £400 (€476) discount on their energy bills according to an announcement by the government on Friday, July 29.

Affecting some 29 million households in England, Scotland and Wales, each home will receive £400 (€476) paid over six instalments from October.

How do you claim the discount?

Anyone with a domestic electricity meter who pays for their energy monthly either via debit order, standing order or card, will receive an automatic deduction from their bills. In other words, the energy provider will be responsible for passing on the credit through the monthly bill.

Prepayment customers will be provided with vouchers in the first week of each month either via SMS, email or post depending on the homeowner’s communication preferences.

Customers on prepayment meters are urged to update their details to make sure that the voucher code is received.

The discount

Announcing the discount 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 (€476) discount on energy bills we’re providing will go some way to help millions of families over the colder months.”

New Chancellor Nadhim Zahawi said the discount was: “Part of our £37 billion (€44 billion) of help for households, including eight million of the most vulnerable households receiving £1,200 (€1,427) of direct support to help with the cost of living.”

With warnings that the consumer energy price cap could see bills rise to $3,500 (€4,167) from October, the two Tory leadership hopefuls and Boris Johnson agreed that a package was needed to help consumers.

Pressure by Money Saving Expert Martin Lewis was instrumental in moving a government hamstrung by the Tory election leadership election, to make the gesture.  

The £400 (€476) energy bills discount for households will bring welcome relief for consumers, however, most believe that it will do little more than reduce the level of the increase much as the petrol discount did.

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