From next month, everyone who pays an energy bill will be getting a rebate towards the cost of living this winter.
The move was announced by then Chancellor Rishi Sunak earlier this year and confirmed by new Prime minister Liz Truss as part of her cost of living measures last week.
According to the government, more than 29 million households are eligible for the discount, worth £400, which will be paid automatically in six instalments from October until next March.
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Don't worry, you don't need to apply for the money and you don’t need to pay it back - you will receive it in instalments of £66 in October and November, and £67 each month from December to March.
However, although most households will get the cash, how they get it is up to the energy suppliers, who have the freedom to determine how they will distribute the money to their customers.
Some will pay the instalments into your bank account, but others will treat it as a bill credit or a direct debit discount.
If you switch suppliers between October 2022 and March 2023, you will still receive your discount from your new supplier. If you change the way you pay your bill, your discount will be applied to the new payment method.
Here's what we know so far:
British Gas
Direct debit: Your direct debit will be claimed as normal, and you will receive the rebate as a credit to your bank account, spread over six months. If your monthly direct debit is less than the rebate amount, you will get your direct debit amount refunded to your bank account and the remainder added as a credit to your energy account. So for example, if your monthly direct debit is £60, you will get £60 refunded to your bank account and the remaining £7 paid to your energy account.
Payment on receipt of the bill: Your discount will be applied to your account balance each month.
Smart prepayment meter: Your discount will be applied to your meter each month, just like a top-up.
Traditional prepayment meter: You’ll get your discount via vouchers, which you can then cash in when you top up in your normal way. Once the discount has been received by you in full, your meter payments will revert back to normal.
Bulb
Direct debit: Bulb customers will receive the discount automatically and their direct debits will be adjusted accordingly. So if you normally pay £200 a month, you will pay £133 or £134 for the duration of the discount.
Smart prepayment meter: The rebate will be credited monthly to your electricity account.
Traditional prepayment meter: You’ll get a voucher each month by email or post. You'll need to show some identification that matches the name on your account to redeem the voucher at the Post Office.
E.ON and E.ON Next
Direct debit: E.ON is treating customers that pay by direct debit differently, depending on their tariff. If you are on a fixed energy tariff, your rebate will be deducted from your monthly payment. If your payments are less than £66/67, the firm will reduce payments to £0 and add the extra as an account credit. however, if you're paying the standard variable tariff by direct debit, your rebate will be added as a credit on to your account each month, and any excess credit will be carried over to the following month.
Payment on receipt of the bill: Money will be automatically applied as a credit to your energy accounts in the first week of each month.
Smart prepayment customers: The money will be credited directly to your meter as a top-up in the first week of each month, as a split credit to gas and electricity meters
Traditional prepayment customers: You will be provided with vouchers in the first week of each month. These will only be redeemable at the Post Office, not at all top-up locations.
EDF
Direct debit: Customers who pay by monthly direct debit will pay their bill as normal. They will then receive the discount in cash directly into their bank account after a successful bill payment is made.
Payment on receipt of bill: The energy rebate is automatically credited to your energy account in the first week of each month.
Smart prepayment meter: You will receive the discount automatically through a credit on your device within the first two weeks of the month.
Traditional prepayment meters: A voucher from the Post Office within the first two weeks of each month to redeem when you top up.
Ovo
Direct Debit: You’ll receive your discount as a refund. This means you’ll carry on paying your full direct debit amount and once it has cleared, the monthly discount amount will be sent to your bank account shortly after.
Payment on receipt of bill: You’ll receive your monthly discount as a credit to your energy account in the first week of each month. You’ll see this on your monthly bills from October.
Smart prepayment meter: Your monthly discount will go straight to your electricity smart meter as a credit in the first week of each month. SSE will get in touch from October to confirm each time the credit is added.
Traditional prepayment meter: You'll receive vouchers by email or post within 11 working days of the 1st of each month. You can use each voucher at a PayPoint shop to top up your electric or gas meters, or both. You only have 90 days to redeem each voucher from the date it was issued.
Octopus Energy
Direct debit: Octopus electricity customers will get an automatic monthly credit of £66 in October and November and then £67 between December and March. If a customer’s direct debit payment is less than £67, the firm will look to apply a payment holiday (reducing certain direct debits to £0) and credit their account with the remaining amount.
Smart prepayment meter: The discount will be added directly onto their meter as a credit.
Scottish Power
Direct debit: Scottish Power customers will be expected to pay their bills as normal and then receive the cash discount back as a payment into their bank account. Customers will be contacted between now and September 19 to find out how the new energy price cap affects them.
Payment on receipt of the bill: The discount will be automatically applied to your energy account during the first week of each month and you’ll see the discount on your next bill.
Smart prepayment meter: The discount will be automatically applied to your meter in the first week of each month.
Traditional prepayment meter: You'll receive vouchers every month by email or post. You can then take your voucher to any PayPoint outlet to have the value added to your payment device.
Shell Energy
Direct Debit: You’ll automatically receive the discount as a reduction to your monthly payment. If your monthly direct debit is collected three working days after the discount is applied, you’ll see £66/67 deducted from your payment. If your monthly amount is collected more than three working days before the discount is applied, you’ll see £66/67 deducted from your payment the following month.
Payment on receipt of the bill: The discount will be applied to your energy account each month. It will appear on the bill as an extra payment, so you’ll owe £66/67 less than you normally would.
Smart prepayment meter: If you have dual fuel, each monthly payment will be split 50/50 across your electricity and gas meters. You’ll receive the payment on your smart meter in the first five working days of each month.
Traditional prepayment meter: Each month, you’ll receive a voucher by post, which you can redeem at any PayPoint, Payzone, or Post Office branch. If you prefer, you can ask the shop assistant to split the discount between your electricity and gas meters. Vouchers will be issued within 11 working days from the start of each month. Each voucher is valid for three months, with a final expiry date of 30 June 2023.
SSE
Direct Debit: You’ll receive your discount as a refund. This means you’ll carry on paying your full direct debit amount and once it has cleared, the monthly discount amount will be sent to your bank account shortly after.
Payment on receipt of the bill: You’ll receive your monthly discount as a credit to your energy account in the first week of each month. You’ll see this on your monthly bills from October.
Smart prepayment meter: Your monthly discount will go straight to your electricity smart meter as a credit in the first week of each month. SSE will get in touch from October to confirm each time the credit is added.
Traditional prepayment meter: You'll receive vouchers by email or post within 11 working days of the 1st of each month. You can use each voucher at a PayPoint shop to top up your electric or gas meters, or both. You only have 90 days to redeem each voucher from the date it was issued.
Utilita
Direct debit: The six payments will be automatically added as a credit to your account. That means the cash will reduce your overall bill.
Smart prepayment meter: Those on smart prepayment meters will be credited automatically.
Traditional Prepayment meter: Those on traditional prepayment meters will get the discount in voucher form.
Utility Warehouse
Direct debit: Customers on fixed energy tariffs and the standard variable tariff will see the discount come off their bill. Customer direct debits will be adjusted before each monthly bill to reflect that the customer has received the discount. For example, if your Budget Plan payment was £166 in October, UW would only request £100 from your bank account, with the £66 being provided by the Government discount.
Payment on receipt of the bill: The payments will be applied to your account and will reduce the value of your bill each month. If you use less than the £66/£67, you can request for the credit to be refunded or leave it in your account to go towards your next bill.
Smart prepayment meter: The payments will be sent remotely to your meter at the beginning of the month and will be available to use within a few days. We’ll let you know that the payment has been made.
Traditional prepayment meter: The payments will be sent to you in the form of a voucher that can be redeemed from any PayPoint counter against either your electricity or gas meter. UW will automatically post these vouchers to you at the beginning of each month but it may take up to 11 working days for the vouchers to be delivered.
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