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What to do if you’re worried about your energy bills after the price cap rise announcement

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If you’re wondering how your household finances are going to be affected over the coming months, find out about the Ofgem energy price cap rise, Council Tax bills rebate and what other help the UK government has announced.

Energy price cap to increase by almost £700 from April

On 1 April 2022, energy regulator Ofgem will increase the energy price cap for default and prepayment tariff energy customers in England, Wales and Scotland (see below for changes that will affect customers in Northern Ireland).

The average household on a default tariff (sometimes also called a standard variable tariff) paying by Direct Debit will see an increase of £693 from £1,277 to £1,971 per year.

If you’re on a pre-payment meter, you’ll see an average increase of £708 from £1,309 to £2,017.

Bear in mind you could pay more or less than this if your energy use is greater or lower. 

If you’re currently on a fixed-rate tariff, you’ll be moved to your provider’s standard variable tariff when the fixed term ends.

Energy price rises in Northern Ireland

The Utility Regulator which regulates energy in Northern Ireland has said that the average gas customer in the Ten Towns area supplied by Firmus energy will see their annual bill increase to £1,293 per year.

So far there has not been a similar announcement for customers in the Greater Belfast area.

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£200 energy bills rebate loan

On 1 October 2022 the government will fund a £200 rebate to all domestic electricity customers in England, Wales and Scotland (similar funding is expected for Northern Ireland next year).

This discount to your energy bill is a loan and will need to be paid back at £40 per year over the next five years on your energy bills from April 2023 to 2028.

£200 payment for winter fuel bills in Wales

If you live in Wales and are claiming certain benefits such as Universal Credit or Income Support, then you can claim an additional one-off payment of £200 from your local authority to put towards your winter fuel bills.

£200 payment for winter fuel bills in Northern Ireland

If you live in Northern Ireland and are claiming certain benefits such as Universal Credit or Income Support, then you will get a one-off payment of £200 from your local authority to put towards your energy bills.

£202 payment for winter fuel bills in Scotland

If you live in Scotland, are claiming certain benefits and your household has a child aged under 19 years, then you should get a one-off Child Winter Heating Assistance payment of £202 from Social Security Scotland.

The payment should have been automatic and paid in November 2021, but you can find out more about the payment (Opens in a new window) on the MyGOV.Scot website 

Warm Home discount planned to increase to £150

If you’re on low income and claiming certain benefits the Warm Home Discount gives you money off your electricity bill for the winter period bills between October and March.

From October 2022 the government plans to increase the discount to £150 (from £140) and increase the number of households that will be eligible.

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More help if you’re struggling to pay your gas or electricity bill

Not being able to afford to heat or power your home can be very worrying and stressful. It’s important to continue paying these bills and there's help available from your supplier if you’re struggling before you get into debt.

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If you’ve already missed more than one payment on your gas bill, now is the time to get debt advice.

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£150 Council Tax rebate

In April, all households in England on Council Tax bands A to D will receive a one-off £150 rebate on their Council Tax bill for that month. You won’t need to pay it back.

If you’re paying by Direct Debit, the rebate should be automatically discounted from your April bill by your local authority. If you pay less than £150 a month, you’ll get the discount across two payments. If you don’t pay by Direct Debit, your council should start to process the discount from April. 

If you are renting or do not pay your Council Tax bill directly, make sure you ask the person (such as your landlord) who does to pass the discount on to you. 

In Scotland, properties in bands A-D as well as households in all bands who get Council Tax Reduction will also receive £150 towards their Council Tax. Individual councils have been given the choice to either send the £150 as a payment or to give it as a discount on Council Tax bills. You should start to receive your discount or payment in April 2022.

The Welsh government has also approved a £150 payment to households in Council Tax bands A-D and those in bands E or F who receive Council Tax Reduction. There isn’t much information about how you can claim the £150 yet, but your local council should be in touch.

Financial support for households not eligible for the Council Tax rebate

If your property is in Council Tax bands E to H or you live in Northern Ireland then you may still be eligible for help paying your Council Tax (or your rates in Northern Ireland).

The government has committed to £144million of discretionary funding for local authorities in England to use. There’s a further £715million for support in Scotland, Wales and Northern Ireland.

Funding will be allocated on a case-by-case basis. Contact your local authority to find the support it is providing.

Bank of England base rate rise to 0.5%

The Bank of England has raised interest rates from 0.25% to 0.5%. This could affect you if you have a mortgage on a standard variable rate.

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