How will the £400 energy grant be paid?

The £400 energy grant is being paid to households to cut bills this winter. We explain how your energy supplier will pay your.

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The £400 energy grant is being applied as a discount to energy bills from October 2022 until March 2023 for all households in England, Scotland and Wales.

Former chancellor Rishi Sunak introduced the energy bill discount earlier in the year and – despite leadership changes – it will continue, along with the new Energy Price Guarantee (EPG) which puts a cap on the unit price of energy.

People who were previously not included in the scheme such as 850,000 park home residents and 585,000 renters whose landlords pay their energy bills will now also get the payment. 

Between the new cap and the £400 energy bill discount, a household with typical levels of energy use may "only" see their bills increase by around 6.5%, from the start of October, rather than the 80% increase that would have taken place under the old energy price cap.

The government has given energy suppliers a certain amount of freedom over how to hand out the £400 energy bill discount. Here’s how the rebate will be paid by the main energy suppliers.

When will the £400 energy bill discount be paid?

You do not have to apply for the discount, it will be paid directly into your energy account. Payments have already started to be paid but they won’t all come at once. The £400 will be spread out and paid incrementally over a six-month period, starting in October 2022. 

For the first two months, you'll get £66 off your bill, followed by £67 per month from December until March 2023.

Who will get the energy bill discount?

More than 30 million households in England, Scotland and Wales will benefit from the £400 energy energy bill discount, while equivalent support will be provided to households in Northern Ireland through the Northern Ireland Energy Bills Support Scheme (NI EBSS).

Regardless of people's income, all households that are connected to the electricity mains and pay for their energy will receive the payment. Park home residents and those living in households who were previously excluded from the scheme will now also receive the payment. 

The discount will be paid each month regardless of how often you pay i.e. monthly or quarterly. If your home circumstances change for example you happen to move house, the discount won’t be affected. 

Those who feel they don’t need the £400 energy bill discount can donate their share to charities to help others get through the cost of living crisis. Some people have already started to donate:

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How will energy suppliers pay the energy bill discount?

How will British Gas pay the energy bill discount?

If you pay by Direct Debit, as most British Gas customers do, you will receive the £400 energy bill discount as six direct payments into your bank account over a six-month period – once you’ve paid your monthly Direct Debit. So you’ll pay your bill as usual via your monthly Direct Debit and then receive what looks like a refund to your bank account.

In an email to customers, British Gas said: "For Direct Debit customers, we'll send the discount straight to your bank each month – like a refund – once your Direct Debit has gone through.

"For example, if your Direct Debit is £100 a month, you'd pay as normal. Then a few days later, £67 will be paid into your bank account.”

If you pay by credit, you'll receive your bill and pay it by card, cash or cheque, the discount will then be automatically applied to your account in the first week of each month and added to your bill.

How will EDF pay the £400 energy bill discount?

Like British Gas customers, if you’re an EDF customer who pays by Direct Debit you’ll receive the £400 energy bill discount as six direct payments to your bank account over a six-month period after you’ve paid your monthly Direct Debit.

Again, if you pay by credit, receive your bill and then pay it by card, cash or cheque, the discount will be automatically applied to your account in the first week of each month and taken off your bill.

How will OVO pay the £400 energy bill discount?

If you pay your OVO Energy bill by Direct Debit, then the usual discount will be applied directly “shortly after” the initial payment has been made.

However, if you pay on demand, the discount will instead be credited into your account in the first week of each month.

How will Scottish Power pay the energy discount?

As with other suppliers, Scottish Power will be paying the energy bill discount in six payments, with the first two months being for £66, followed by £67 from December onwards.

If you pay by monthly Direct Debit you'll see the discount issued as a refund to your bank account after the initial Direct Debit has been collected, while those who pay on demand will see the discount applied automatically to their account during the first week of each month.

Prepayment meter customers will either have the discount applied automatically or receive a voucher, by post or email.

How will E.ON pay the £400 energy bill discount?

If you’re an E.ON customer who pays by Direct Debit, you will see the six discounts over six months taken off your bill before your Direct Debit is taken.

E.ON customers who pay on receipt of their bill will see the money automatically applied as a credit to their energy accounts in the first week of each month. It will show up as a credit in the payments section of your monthly bill.

How will Shell Energy pay the £400 energy bill discount?

If you’re a Shell Energy customer who pays by Direct Debit you will see the six discounts over six months taken off your bill before your Direct Debit is taken.

This means that if your Direct Debit is £120, for example, Shell Energy will deduct £66 in October and November, and then £67 in December, January, February and March - making your Direct Debit £54 in October and November, and £53 December to March.

Shell Energy told us customers who pay their bill by card, cash or cheque - will see the discount appear on their bill as an extra payment each month from October to March, so they’ll owe less than they would otherwise - £66 the first two months and £67 thereafter.

In an email to customers Shell said: “The discount will appear on or around the 7th of each month. You can see it, along with how much you owe, on your bill or in the ‘Account Summary’ section of your online account”

How will Bulb pay the £400 energy bill discount?

Bulb customers will see the energy bill discount paid in monthly instalments of £66 in October, £66 in November, and £67 each month from December to March.

For those who pay the same amount each month, it will be dedicated from their monthly payments, while for those on variable Direct Debits, an account credit worth those figures will be added to the account each month. Any excess credit will be carried over to the following month.

For smart prepay customers, the payment will be added as a credit to your account, while vouchers will be sent to non-smart prepay users, which they can redeem wherever they would normally top up their meter.

How will Utility Warehouse pay the £400 energy bill discount?

Utility Warehouse customers will get the energy bill discount in six automatic payments from October. The first payments of £66 each will be applied to their bills for October and November, with £67 then paid each month from December through to March.

Customers with a smart prepayment meter will see the payments sent remotely to the meter at the beginning of the month and will be available to use within a few days. Those with traditional prepayment meters will instead be sent a voucher which can be redeemed at any PayPoint counter.

Utility Warehouse warned that it may take up to 11 working days for the vouchers to be delivered, and you will need to show some form of photo ID in order to claim the voucher.

How will Octopus Energy pay the £400 energy bill discount?

Octopus has said it will reduce bills for Direct Debit customers by £67 each month for six months from October. This will happen immediately so that households can feel the benefits straight away.

If you don’t pay by Direct Debit, your account will be credited by £67 each month. 

£400 energy grant for prepayment meter customers

Smart prepayment meter customers will see the discount credited directly to their meters in the first week of each month of delivery – you won’t have to take any action at all.

Customers with traditional or ‘non-smart’ prepayment meters – that need topping up with a key or card – will be sent vouchers that can be used at Post Offices and PayPoint locations, including small convenience stores.

The vouchers were due to be sent out from 1 October but the BBC has found (opens in new tab) that many traditional prepayment meter customers are yet to redeem their vouchers – or, in some cases even receive them. Twitter is also awash with complaints from customers many of who claim they’ve not even received their first payment voucher. Twitter users complained about delays from energy suppliers including EDF Energy, SSE, Scottish Power and E.ON Next.  

The vouchers are valid for 90 days. However, the Post Office has said only 60% of eligible customers have redeemed their vouchers. PayPoint told the BBC its customers have only redeemed around half the vouchers it expected, so far.

The Money Edit contacted some of the major energy suppliers including British Gas, Octopus, EDF, E.ON Next, Scottish Power, Ovo and Shell Energy to ask if there had been delays in issuing vouchers.

EDF and Ovo have replied. EDF said that all pre-payment vouchers have now been sent out to eligible customers and that they are “sent out within the first two weeks of each month”. For its part, Ovo said that “due to postal strikes the Energy Bill Support Scheme vouchers may arrive later than expected”.  

The Post Office is urging anyone who has received their voucher but not yet redeemed it to do so – because of the 90-day limit. It also says that if you forgot to claim your October discount you should bring the voucher when you go to claim your November discount. 

If you haven’t received your October voucher contact your energy provider.

More energy bill discount questions

Will I get the £400 rebate if I am renting?

Yes. Whether you rent and pay the energy bills OR pay an ‘all-in’ rent to your landlord that includes bills (in other words, your name is not on the utility bills and you do not directly pay them) you will receive the £400 rebate.

Previously, tenants who pay an ‘all-in’ rent were excluded but the government has stated it is committed to seeing all households receive the same support for their energy bills. Landlords who let their property will be legally required to pass on the £400 discount to tenants who pay all-inclusive rent and bills.

This legislation will be introduced after Citizens Advice (opens in new tab) highlighted 585,000 households were essentially "at the mercy of their landlords" because the discount was set up to be given directly to the billpayer.

Will I get the £400 rebate if I line in a Park Home or on a houseboat?

Yes, you will receive the £400 payment if you live in a mobile home, such as a park home or houseboat. 

The government has stated that “Additional funding will be made available so that £400 payments will be extended to include people such as park home residents.”

Previously, park home residents and those living on houseboats were excluded from the support. Like an ‘all-in’ tenant, park home residents pay a ‘pitch’ fee to the park home owner for use of the site and its energy facilities and won’t see the energy bill discount themselves. Similarly, if you live on a houseboat where there is also no direct domestic energy provider. New government guidance (opens in new tab) states that park home residents will get the payment via the  Energy Bill Relief Scheme. Home residents don’t have to do anything to receive the payment, and they will get it by the end of the year.

Will I get the £400 rebate if I am off-grid?

Not everyone uses the gas and electricity grid, instead powering their homes through heating oil or alternative fuels.

The government has said that equivalent support will be provided to people in this position, though we are still waiting for the details on how that will work.

In addition, there will be an additional payment of £100 to households who are not able to receive support for their heating costs through the Energy Price Guarantee. This might be because they live in an area that is not served by the gas or electricity grid such as Northumberland and the remote Scottish Islands and Peninsulas. The £100 payment aims to compensate for the rising costs of alternative fuels such as heating oil.

Do I need to pay the £400 energy discount back?

The £400 energy bill discount does not have to be repaid.

It changed from the original £200 energy bill discount which required households to pay the sum back from April 2023. This was scrapped and replaced with the £400 payment  which you don't have to pay back

What other help will be available to help with the cost of living?

Other measures have also been introduced to help with the cost of living crisis, which you may qualify for depending on your circumstances.

These measures include:

The whole cost of living package means around eight million households will receive at least £1,500 – equal to the estimated average energy price cap rise over this year.

In addition, more support measures are being introduced to ensure that consumers are safe from scams related to the energy discount payment.

Is other help available for high energy bills?

There is help with energy costs available if you’re struggling with your bills, while energy suppliers also have hardship funds to help their customers in need.

It may also be worth speaking to debt charities like StepChange (opens in new tab) or National Debtline (opens in new tab) if you are currently unable to pay your bills and need help.

Government grants are available to help install energy-efficient measures in your home at a discounted rate, saving you thousands of pounds, for example, The Boiler Upgrade Scheme and loft and cavity wall insulation.

You may also find our article on unfair direct debit increases useful. See how The Money Edit helped one reader bring her direct debit down after her energy company hiked it from £117 to £369.

A new GOV.UK website (opens in new tab), originally available through the Simple Energy Advice (SEA) service, offers a breakdown of support available through various schemes and how much financial support they can receive towards energy improvements.

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Katie Binns

Katie is staff writer at The Money Edit. She was the former staff writer at The Times and The Sunday Times. Her experience includes writing about personal finance, culture, travel and interviews celebrities.  Her investigative work on financial abuse resulted in a number of mortgage prisoners being set free - and a nomination for the Best Personal Finance Story of the Year in the Headlinemoney awards 2021.

With contributions from