Here's what's happening with the £400 grant for energy bills
You might have seen in the news that the government is giving every household a £400 grant in the Autumn. Here's what it is, how you get it, and how we're passing it on to every single Fused/One Utility Bill customer.
Important: This is a constantly updating situation, so we’ll update this post to reflect changes. Our customers might get email updates about changes too We’re always working to keep you in the loop and appreciate your understanding.
What is the £400 grant?
It's money from the government to lower the cost of (almost) every UK household's gas and electricity bills. This is to reduce the impact of rising energy costs and the cost of living crisis generally on people's finances.
This was originally planned to be a £200 payment that would need to be paid back, but that's all changed. It's now a £400 grant. This means a reduction in your monthly direct debits or card payment, with no repayments later. We’re passing this straight on to all One Utility Bill customers.
The grant is being paid for by a windfall tax on companies that generate energy, who are currently making a lot more money due to the increased cost of fuel.
How will we get the £400 energy grant?
We're passing it straight on to you via a reduction in your bills, as labelled in the graphic.
From October, all energy suppliers will get money from the government to reduce household energy bills by £400 over six months. One Utility Bill customers will get a reduction of £66 for the first two months, and then reductions of £67 over the next four months.
Who gets the government energy grant? Is it for everyone?
Almost everybody qualifies. If your house or flat has a domestic electricity connection, you're eligible for the grant.This covers basically all homes, as you can imagine, adding up to about 28 million households in total. If you have a One Utility Bill package, you qualify. Simple!
However, some people entitled to the grant won't get money from the scheme directly, it’ll go to whoever manages their bills for them - maybe their landlord, or a service like ours. We just want to be really clear that we're passing every penny of the grant to all One Utility Bill users.
The grant will come off your monthly direct debit to us, as it would directly from gas and electricity supplier.
How do I claim the £400 energy bill payment?
You don't need to do anything! The direct debit you pay to us, or direct to your energy company, each month will automatically have money taken off each month from October 2022. This is true for our customers, and for people who get their gas and electricity directly from their supplier.
If you use another bills service, you'll need to check their system, but it should be similar. This is also true if your bills are included in your rent. Your landlord or bills service will receive the payment and should be passing it on in the same way.
The system is also slightly different for people who use a pre-payment electricity meter. They'll get the payment as credit onto the meter. People in Northern Ireland will also get the payment a little differently because of how gas and electricity are handled in that country.
Why is the government giving this grant anyway?
The energy crisis means that energy prices are reaching prices nobody's ever seen before, and they're due to increase in October when the new OFGEM price cap is set. If you want a rundown of the energy crisis, we went into the detail of what caused it and why it affects energy prices earlier this year.
COVID and lockdowns had a big impact on energy supplies, making energy more expensive
The Russian invasion of Ukraine meant that Europe's gas prices went up. Sanctions meant many countries that relied heavily on gas from Russia had to buy from elsewhere, making gas even more expensive.
You can see in the graph below just how the invasion affected the cost of energy.
You can see details of why the prices changed at each point here.
Is there any other support available?
We're bills specialists, so this isn't really our area, but we can tell you that the grant is part of a bigger chunk of support from the government designed to make things less difficult during the cost of living crisis.
The energy crisis is contributing to the cost of living crisis, but it's not the whole story. People on certain benefits, such as Universal Credit, will get some additional help, e.g. direct payments to their bank, to make ends meet, as well as reduction in council tax for some people who pay it.
Citizens Advice has compiled a lot of information on this for people who need it. It's a great place to start if you need more information about help you could get.
How can I learn more about what's going on?
As well as the links we've dotted throughout this blog, we've compiled a few guides to explain what's going on with the energy crisis. Take a look: