03
February 2022
Government announces £350 rebate to assist with rising bills
Millions of households across Britain are set to receive up to £350 in support to help combat the rising cost of living.
The newly-announced government support will be split into two payments. The larger of the two comes in the form of a £200 energy bill rebate, which will be distributed to every electricity customer in the UK from October. However, it will be repaid over the next five years through incremental £40 charges on bills.
To ensure that nobody falls between the cracks, the government will also be issuing £144 million to local authorities. This will provide specialised support for lower income households who either do not pay council tax or reside within brackets E-H.
Questions over what financial support the government would offer have been around for some time. Growing concerns about inflation, with rising energy bills the main culprit, meant it was more a question of ‘how much’ rather than ‘what if’.
Speaking on the decision, Chancellor of the Exchequer Rishi Sunak said: “Right now, I know the number one issue on people’s minds is the rising cost of living.
“That’s why the Government is stepping in with direct support that will help around 28 million households with their rising energy costs over the next year.
“We stood behind British people and businesses throughout the pandemic and it’s right we continue to do that as our economy recovers in the months ahead.”
Sunak’s announcement comes as Ofgem today confirmed that the much discussed energy price cap, a figure limiting how much suppliers can charge customers, would rise by 54% in April. The record-breaking adjustment means that those on default tariffs will see average bills rise by £693 per year. Meanwhile, those on prepayment metres will see a £708 annual increase.
Jonathan Brearley, chief executive of Ofgem, said: “We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.”
Unfortunately for UK households, rising energy bills are not the only thing driving the current cost of living crisis. Also scheduled for April is a 1.25% increase in National Insurance contributions and a reduction in certain state benefits. A paper released by the British Retail Consortium earlier this week also found that shoppers were seeing consumer goods reaching their highest prices in nearly a decade.
