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Details of how £400 and £650 cost of living payments will be made

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To again assist with the worsening cost of living crisis, the Conservative Government is planning on dishing out more support in the form of grants and payments. The support will come as energy bills look set to become even more burdensome over the winter months.

Ofgem, the energy regulator, is anticipated to increase its energy bill cap to £2,800 in October this year due to a number of factors and the overall volatility of the market. This will mean households across the country will have faced bills rising from the cap of £1,270 in October last year, to £1,971 in April and then £2,800 by the end of 2022.

A significant number of energy companies went bust recently because they had been unprepared for the sharp rise in wholesale gas prices. This surge in costs is partially led on by the war between Russia and Ukraine and the coronavirus pandemic, however, others have accused energy firms and gas giants of profiteering.

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Chancellor Rishi Sunak recently unveiled a second batch of support measures to help the growing costs of living, including record petrol and diesel prices at the pump and hikes in supermarket food costs. One such measure was a one-off windfall tax on energy giants, which the Government U-turned on due to pressure, because they had recorded record profits.

So far, Brits, including those in Nottinghamshire, have received a £150 (or more) council tax rebate and the new support measures now include up to £1,200 in grants and payments. The two most significant include a £400 energy discount for all households and an additional £650 payment for eight million low-income households.

How will I get the £400 discount?

According to the Government, all suppliers will be applying the reduction to bills from October 2022. It is not another payment like the tax rebate. A consultation over how it should be delivered concluded in May and the Government’s response to its recent consultation on the scheme is expected to be published in the summer.

This had been proposed to be delivered in the form of a £200 loan, but the Government U-turned on this, too. The Government says: “Through the scheme, domestic electricity customers in Great Britain will receive a £400 grant which will appear as a credit from energy suppliers from October 2022 onwards. This will not need to be repaid.

“All households with a domestic electricity connection will be automatically eligible for the £400 grant. There is no need to contact energy suppliers concerning this at this point.”

Those on pre-payment meters will also get the discount. “Previous schemes have used vouchers to reach those on prepayment meters and we will ensure that households whose energy is managed in this way will receive the grant,” the Government adds.

How will I get the £650 payment?

This measure is a payment. Roughly eight million low-income households which qualify will receive the first of two cost of living installments totalling £650 from July 14. The initial automatic installment will be £326 and the rest will follow in a second installment in the autumn.

The Government says: “The second installment of £324 will be sent to qualifying low income households in the autumn. The payments are designed to be deliberately slightly unequal to minimise fraud risks from those who may seek to exploit this system.

“The eligibility date for the second instalment will be announced soon. Support includes the direct payment of £650 for over 8 million households on benefits, a separate £300 payment for pensioners, and a £150 payment for disabled people, which can be paid on top of the £650 payment.

“This is on top of £400 for all households to help with energy bills, and an extra £150 for properties in Council Tax bands A-D, meaning millions of the lowest-income households will receive at least £1,200 in support this year.”

Written by: thehitnetwork

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