What the energy bill hike and government rebate mean for your household

The government are stepping in to help

On Thursday, the government announced that the energy bill price cap increase will go ahead in April, meaning households will pay more for gas and electricity after this date.

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However, chancellor Rishi Sunak has devised a plan to implement savings elsewhere to help families foot this bill increase.

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Each household will be entitled to up to £350 in savings. Firstly, there will be an Energy Bills Rebate discount which means the government will pass on money to the energy suppliers who in turn will provide discounts for customers. This discount will be eventually repaid further down the line from 2023 when wholesale gas prices are predicted to settle, alleviating the pressure.

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The energy price cap is being increased

Secondly, there will be a council tax rebate of £150 in April, but this will only apply to households in tax bands A to D. You do not have to apply for this, as if you are eligible, it will be automatically processed.

Thirdly, there is a £144 million fund for lower-income households and this will be up to the discretion of the local authority to distribute so do check your local website in the coming days and weeks.

Energy bills will rise from April

Do the government rebates apply across the UK?

"The £200 energy bills discount applies across England, Wales and Scotland. The £150 Council Tax Energy Rebate applies in England only," reads gov.uk.

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How to find out which council tax band you are

If you're sat there wondering 'how do I find out which council tax band I am?' you can easily search for it on the government website.

So is the cost of living still increasing?

Yes, the energy cap is still being increased, meaning you can be charged more for gas and electricity from April. It is a 54% rise in annual energy bills, which equates to an average household having to find an extra £693 per year to keep warm.

Most people will be eligible for a council tax rebate

However, the government's incentives will approximately half this increase for around 80 per cent of households. "We can take the sting out of this significant price rise for millions of families," said Rishi in the House of Commons.

How much is the council tax rebate for energy bills?

Most households will benefit from the £150 council tax rebate and will be able to reap the rewards of the £200 energy bills discount. 

What else is being done to help with the rising cost of living?

The government is going to be widening the eligibility for the Warm Home Discount, meaning more families on low and middle incomes will be able to get assistance with their energy bills. Rishi explained that more guidance on this was set to follow.

 

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