Energy Bills Support Scheme: What is the scheme, who is eligible, do you need to apply, is it a government loan and how much is the discount?

Energy bills are rising across the UK due to the expense that energy companies are facing to buy oil, coal, and gas.

Gas prices have risen across the globe due to the pandemic and the demand for energy following a long, cold winter last year.

The world is also seeking to end its dependence on Russian gas and oil following their invasion of Ukraine.

But what is the Energy Bills Support Scheme and how much is the discount?

Here is everything you need to know:

What is the Energy Bills Support Scheme?

Many households will need support to help with the rising cost of energy bills.

The government has announced a package of support worth £9.1 billion from 2022 to 2023, which includes the Energy Bills Support Scheme.

Domestic electricity customers in England, Scotland, and Wales are set to receive a reduction in their electricity costs from October 2022.

Households who receive the scheme will need to pay the money back by no more than £40 per year through the levy.

Therefore, all domestic electricity consumers will pay a charge in future years.

How much is the reduction?

The government has announced a reduction of £200 to help tackle the cost of energy bills.

The scheme is in addition to a non-repayable £150 council tax rebate for those in bands A to D.

Am I eligible for the scheme?

All households with a domestic electricity connection are automatically eligible for the reduction.

Those on a traditional pre-payment meter will also be eligible for the reduction.

Do I need to apply for the support scheme?

Households do not need to apply for the scheme, and in most cases, the government expects electricity suppliers to apply the reduction automatically to bills from October.

Is it a government loan?

The scheme is not a loan, it is a grant now, with a levy on future bill payers.

There will be no interest due, it will not affect your credit rating and there will be no interest due.

SEE ALSO: Why have EDF energy prices only risen by 4% in France compared to 54% in the UK?

What if I move house or switch supplier?

All energy suppliers will be applying the reduction to bills from October and costs will be recouped from 2023 over five years.

The support scheme will be based on electricity meter points, so it will not effect those who move house or switch supplier.