The price cap rise came into effect on 1 April 2022, and means millions of households are spending a significant amount on their energy bills as the overall cost of living also increases in other areas like food bills.
With that in mind, the government has announced a package of relief measures designed to help alleviate the financial pressure on households over the rest of the year. The measures initially announced when the cap rise came into effect have now (as of 26 May 2022) been updated by the government, partially in response to the recent projection by Ofgem of a £2,800 cap coming in the autumn.
The most significant measures are as follows:
All energy customers in England, Scotland and Wales will receive a £400 discount on their electricity bills from October 2022 - this will not have to be paid back.
£650 will be granted to eight million of the UK’s most vulnerable households - those who receive Universal Credit, Tax Credits, Pension Credit and legacy benefits.
A separate one-off payments of £300 will be made to pensioner households
Another payment of £150 will be made to households receiving disability benefits.
Announced in the first wave of relief measures, 80% of households in England - those in council tax bands A-D - will also receive a £150 Council Tax rebate from April 2022. Check which council tax band you're in here.
£500 million increase will also be added to the Household Support Fund, which is delivered by local authorities and is now extended until March 2023. This brings the total Household Support Fund to £1.5 billion.
For the most vulnerable people and those on low incomes who do not pay Council Tax, or who pay Council Tax for properties in Bands E-H, discretionary funding of £144 million will be provided.
The Scottish government has announced the allocation of its funding to help deal with the cost of living crisis. This includes:
£150 to every household in receipt of Council Tax Reduction in any Council Tax band
£150 for local authorities to pass on to all other occupied households in Bands A to D
£10 million throughout 2022-23 to continue the Fuel Insecurity Fund, which helps households which would self-ration energy use due to unaffordable fuel costs from having to do so
The Welsh government has also pledged to match the £150 Council Tax rebate to all households who live in properties in council tax bands A-D, as well as recipients of the Council Tax Reduction Scheme in all bands. More detail about how the scheme will operate and how payments are made will be announced as soon as possible. £25m will also be provided to local authorities so they can use their local knowledge to help households who may be struggling. Further funding will be provided via the Discretionary Assistance Fund and the Winter Fuel Support Scheme, which will deliver an additional £200 later this year to low income households.
The government has also confirmed that existing proposals to expand eligibility for the Warm Home Discount, as well as the planned £10 uplift to £150 from October 2022, will go ahead. This means three million vulnerable households will now benefit.
We’ve asked Justina Miltienyte, energy policy expert at Uswitch, to answer some of the common queries we've received about the measures, what you can expect and what the likely procedures might be.
It’s also worth noting that the details to these relief measures are still being worked out, meaning they’re subject to change at short notice, the information above and the answers Justina’s provided below are accurate as of 3 February 2022.
All households in England, Scotland and Wales with a domestic electricity connection will start getting the rebate automatically from October 2022 to help with their bills - there's no need to apply for it. It is now a grant, not a loan. There will be no interest due, no debt attached, and it will not affect your credit rating.
No - all households will get £400 because the rebate is based on electricity usage.
Yes. Previous schemes have used vouchers to reach those on prepayment meters and this will probably be the way it works again.
No - the £400 is a fixed amount.
No, but there are other measures that have been announced that could help before October, such as the Council Tax rebate.
No - all households with a domestic electricity connection will be automatically included in the scheme.
Yes - it applies to both fixed and standard variable tariffs.
No - the scheme will be based on electricity meter points, so you’ll receive it regardless of whether you switch or not.
The easiest way to check your Council Tax band is on gov.uk.
If you pay your council tax by direct debit, the cash will go directly into your bank account from April. If you don't pay by direct debit, you'll be contacted by your council and invited to make a claim.
At this point we don’t know whether the rebate will be received in April as one sum, whether it will be spread across a number of months from April, or whether it will be paid in a different way.
No, you won’t have to repay it.
We've also put together a video with Richard Neudegg, Uswitch's Head of Regulation, to explain what the first package of measures meant for customers.