There has been mounting pressure for ministers to do more to ease cost-of-living pressures, with UK household energy bills tipped to spike to £4,200 in January – more than twice the level of current energy prices.
Fuel bills for drivers and food prices have also risen due to the increased price of fossil fuels.
The government has now released details of how the £400 energy bills discount to help support households this winter will work.
Here is everything you need to know about the scheme:
When will the payment start and who is eligible for the money?
All households in England, Scotland and Wales will receive £400 in energy bill discounts from October.
The support will be issued in six instalments over six months to some 29 million households.
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Households will see a discount of £66 applied to their energy bills in October and November, and £67 a month from December to March 2023.
The non-repayable discount will be given to people every month regardless of whether consumers pay monthly, quarterly or have an associated payment card.
How will people receive the money?
Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills.
Traditional prepayment meter customers will be provided with Energy Bill discount vouchers in the first week of each month, issued via SMS text, email or post.
Customers will have to take action to redeem these in person at top-up points, such as a local Post Office or nearest PayPoint.
Smart prepayment meter customers will see the energy bill discount credited directly to their smart prepayment meters in the first week of each month of delivery.
Will I need to pay the money back?
No, it is non-repayable.
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Do I need to give my bank details?
No. It is important to bear in mind that scammers may use this as an opportunity to strike – just as they did when financial support was announced early on in the coronavirus pandemic and it prompted a slew of fake rebate emails and texts purporting to be from official bodies.
The government says no household should be asked for bank details at any point.
Ministers are urging consumers to stay alert of potential scams and report them to the authorities.
What happens if I move house?
If your housing circumstances change during the six-month period - for instance, if you move into a new home - the government has assured you will still get the remainder of the payments.
Will I get the discount if my landlord pays my energy bills?
Tenants should still be able to benefit from the discount, even if it is going directly to a landlord who pays the energy bills for the property they live in, the government has said.
Its official advice says students and other tenants renting properties with domestic electricity contracts from landlords where fixed energy costs are included in their rental charges.
"In these circumstances, landlords who resell energy to their tenants should pass the discounted payments on appropriately, in line with Ofgem rules to protect tenants."
The official advice does not at this stage explicitly outline how the government or regulators will ensure the benefits are passed on to tenants.
However it has emphasised rules which can protect tenants and ensure they receive the benefit of this policy, and pointed to Ofgem guidance on how to ensure you're being charged no more than you should buying electricity via a landlord.
What additional support is out there?
The government has said that households most in need of financial support will be eligible for further help in addition to the Energy Bill discount. This includes:
A £650 one-off Cost of Living Payment for some 8 million households on means tested benefits.
A one-off Pensioner Cost of Living Payment for over 8 million pensioner households to be paid alongside the Winter Fuel Payment. This is worth £200-£300 and is paid to nearly all homes with at least one person of pension age.
A £150 one-off Disability Cost of Living Payment for around six million people across the UK who receive certain disability benefits.
A £500 million increase and extension of the Household Support Fund available to councils to help with essentials such as clothing and food.
People who are struggling with their energy bills should contact their supplier. Ofgem rules mean suppliers must offer payment plans people can afford and customers can ask for “emergency credit” if they use a prepay meter and cannot top up.
What has the government said about the scheme?
Business and Energy Secretary Kwasi Kwarteng said: “People across the country are understandably worried about the global rise in energy costs, and the pressure this is placing on everyday bills.
“While no government can control global gas prices, we have a responsibility to step in where we can and this significant £400 discount on energy bills we’re providing will go some way to help millions of families over the colder months.”
Chancellor Nadhim Zahawi said the discount was “part of our £37 billion of help for households, including eight million of the most vulnerable households receiving £1,200 of direct support to help with the cost of living”.
The announcement comes after consumer champion Martin Lewis said Boris Johnson and Tory leadership contenders Liz Truss and Rishi Sunak needed to agree a package to help consumers.
He said Boris Johnson’s “zombie government” was failing to address the crisis caused by rising energy bills and warned decisions on support cannot be delayed until Mr Johnson’s successor is in office.
Money Saving Expert’s Mr Lewis said households will start receiving notice of increased bills before the Tory leadership contest concludes, ahead of the energy price cap rising to £3,500 or more in October.
You can find out more information about the Energy Bills Support Scheme here.