Everything you need to know about the government’s cost of living support package to help with your energy bills

Between October 2022 and March 2023, all domestic electricity customers in England, Scotland and Wales are getting £400 off their electricity bill.  

If you pay your bills by Direct Debit or credit, the money should be being credited to your account once a month in six instalments.

If you have a smart pre-payment meter £66 or £67 credit will be added to your meter once a month for six months from October. If you have a traditional pre-payment meter, you’ll get one voucher or Special Action Message (SAM) a month for six months to use towards top-ups . The vouchers will be sent to you in the first week of the month using the contact details your energy company has on file.

Make sure your email, phone number and address are up to date so you don’t miss out. Once you get your voucher, you can use them where you would normally top up, like at the Post Office or a shop with a PayPoint machine. 

On top of the £400 every household will get, if you’re on certain means-tested benefits you’ll also get a £650 cost of living payment. This will be paid in two instalments alongside your existing benefits.  

The first instalment is due to be paid this year in July and the second in the autumn.

Don’t worry, this won’t mess up your benefit entitlements. This payment will be tax free and won’t count towards the benefit cap.

You’re likely to qualify if you’re getting any of these benefits:

• Universal Credit 

• Income-based Jobseekers Allowance

• Income-related Employment and Support Allowance

• Income Support

• Working Tax Credit 

• Child Tax Credit

• Pension Credit.

You’ll also get a further £301 payment in spring this year. If you’re eligible, this will be automatically be paid into your account.
If you’re not getting these benefits and are living on a low income, it’s important to make sure you’re getting everything you’re entitled to. Lots of people are surprised to learn they are, when they assumed they weren’t because they work. It’s worth checking! 

The energy regulator Ofgem has cut the amount of money energy suppliers can charge a household for gas and electric. However, your bills will still rise this spring, as a lot of the Cost of Living support the government has provided is going to ease off in April.  

The energy price cap still exists, but currently, no one pays the rates set by the cap. What we pay is limited by the energy price guarantee (EPG).

Once the price cap falls below the EPG the price guarantee no longer is relevant as it’s the price cap offering protection against higher prices.

The typical household bill will rise to £3,000 in April this year, from £2,100, because the EPG will become less generous and on top of that, the £400 winter discount on all bills will be coming to an end.   

It’s important to note that the government guarantee, just like any energy price cap, does not limit the total bill. It limits the cost of unit of energy – so depending on how much you use, your bill could be bigger.  

Those who use a top-up prepayment meter will also have a bill that is about £45 a year higher than a typical direct debit customer from April, owing to higher fixed costs.  

If you’re State Pension age or older and receive the winter fuel payment, you should have received an extra £300 on top of your annual payment last year.  

This will have been paid to you automatically into your bank account in November or December . You don’t need to do anything to claim it.

This payment won’t affect any benefits you’re already getting and will be paid alongside other support you might qualify for, such as the £650 cost of living payment if you’re getting Pension Credit, disability benefits or Attendance Allowance.

There are around 800,000 people who are entitled to Pension Credit but aren’t claiming it.

As well as all the above payments, you’ll also have been paid £150 in September last year if you’re getting any of these disability benefits:  

• Disability Living Allowance 

• Personal Independence Payment 

• Attendance Allowance 

• Scottish Disability Benefits 

• Armed Forces Independence Payment 

• Constant Attendance Allowance 

• War Pension Mobility Supplement. 

The payment is tax free, so didn’t count towards the benefit cap or affect any other benefits you’re getting. 

It's as well as the £650 cost of living payment you may also qualify for if you’re getting certain means-tested benefits, such as income-related Employment and Support Allowance. 

As much as these energy bill grants will be a big help to lots of people, many others will still find it hard to make ends meet.

If that’s the case for you, you’re not alone and there is help out there. Find out more in our guide Managing your money in uncertain times, which can point you in the right direction.