The money will be paid out in the coldest six months of the year, starting with payments of £66 in October and November, rising to £67 from December to March. Prime Minister Liz Truss recently announced a ‘freeze’ on rising energy price caps, with the typical UK household not having to pay more than £2,500 in energy bills for the next two years.
Before the new policy, the average household’s annual bill was due to rise to £3,549 from October 1 under the latest Ofgem price cap.
The £2,500 energy price guarantee will apply in Scotland, England and Wales, replacing the price cap until 2024.
Government officials are in talks with energy suppliers on how the guarantee policy will be implemented, but it will not affect the £400 rebate.
This means households on a standard rate will see their bills drop from £1,971 to £2,100 once the discount has been applied.
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This price is set at the same price paid by the person reselling it, with the government expecting owners to pass on the discount.
Landlords with a house connection who charge all-inclusive rent, with fixed energy costs as part of the rental charge, must also pass the discount on to their tenants.
For those who do not have a household electricity meter or a direct relationship with an electricity supplier, additional funding must be provided equivalent to the £400 rebate.
More details on how this program will work will be announced by ministers in the fall.
What happens to those who change supplier or my personal situation changes?
The discount will be applied by meter points, so it will not be affected if a person changes supplier.
The program will provide six monthly payments based on six eligible dates rather than a single date in October.
This means that new eligible households will still benefit from the corresponding part of the £400 total as there will be multiple qualifying dates.
Additional government support is being given to people on low incomes, including a one-off payment of £650 to people on certain benefits, including Universal Credit.