Every household in Britain will get a £400 discount on their energy bills under a new cost-of-living support package unveiled by Rishi Sunak.
The chancellor scrapped the repayable discount of £200 that he had initially pledged in February, replacing it with a £400 grant that will not need to be paid back.
More than eight million households on means-tested benefits will receive an additional one-off cost-of-living payment of £650 under Sunak’s £15bn emergency package, which will be funded by a temporary windfall tax.
Other measures announced by the chancellor include a one-off payment of £300 for the eight million pensioners who receive the winter fuel payment and an additional payment of £150 for the six million people who receive disability allowance.
Who is eligible for the £400 discount?
Households with a domestic electricity connection are automatically eligible for the scheme. Direct debit and credit customers will have the money credited to their account between October and April, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher.
According to Money Saving Expert, the £400 payment will be spread over the six months and will not be paid as a lump sum.
The support will apply directly to households in England, Scotland and Wales, while households in Northern Ireland will receive what the government describes as “equivalent support”.
The £400 discount is in addition to the £150 council tax rebate for households in England in council tax bands A-D, announced by Sunak in February.
Jubilee Sale | Try 7 free issues
Start your trial today and enjoy 7 issues for free.
If you qualify for the rebate and pay your council tax by direct debit, your local council will make the payment directly to your bank account. Local authorities will contact anyone who does not pay by direct debit to arrange the rebate payment.
Will the £400 discount help?
Money Saving Expert’s Martin Lewis said he breathed “a sigh of relief” in response to Sunak’s cost-of-living support package. “This is quite a good package and is probably better than I expected it to be,” he said in a video posted on YouTube.
Lewis added that it was not yet clear how exactly the £400 payment will work for pre-paid households.
Labour’s shadow chancellor Rachel Reeves said Sunak had “finally come to his senses”. But, she wrote on Twitter: “Why has it taken so long? Why have families had to struggle and worry while he dragged his feet?”