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Money Saving Expert Martin Lewis has broken down what the new £400 energy bill reduction means for Brits after Rishi Sunak's announcement on Thursday.
Sunak announced this week that all UK households will be given £400 to help with the cost of energy bills, replacing the original £200 energy discount people were due to receive.
Among a series of new measures announced to help struggling households, the chancellor revealed every household in the UK would receive £400 off their energy bills in October.
This followed news that bills will once again rise by as much as 40 percent, taking the average bill to more than £2,800 per year.
For those concerned that they might have to pay back this £400 grant, Lewis was on-hand to share what people could expect.
Unlike the original £200 discount, which had been described by Lewis as a 'loan-not-a-loan' as it had to be repaid in 2023, the new and improved £400 discount will be a grant, meaning recipients are not required to pay it back.
Explaining it all on social media, Martin tweeted: "Many still confused about the £200 loan-not-loan. It has gone. Now in October all energy bills will be reduced by a flat £400. This is not repayable. This is a grant. Every household that gets an energy bill will get it"
Many still confused about the £200 loan-not-loan. It has gone. Now in October all energy bills will be reduced by a flat £400. This is not repayable. This is a grant. Every household that gets an energy bill will get it.
— Martin Lewis (@MartinSLewis) May 26, 2022
(we need to see if it'll be a DD reduction or a credit)
Breaking down the key announcements, Martin explained that low income households could receive £950 while those who also have disabilities could expect to receive £1,100.
Pensioners are also being given £700 to help with the crisis while those in council bands A to D will receive a payment of £150.
Over a year a typical energy bill'll rise £1,500/yr. New help today (need to see t&cs)
— Martin Lewis (@MartinSLewis) May 26, 2022
-Low income homes w/disabilities £1,100
-Low income homes £950
-Pensioner homes £700
-All homes £400
Plus £150 council tax for band A-D.
Initially seems bigger than I expected. Glad to see
Sunak announced the new plans in the House of Commons on Thursday as part of a £15 billion cost of living package.
From April, Ofgem's price cap rose from £1,277 to £1,971, meaning the average household bill could increase by around £693 per year.
Predicting that inflation will peak at 10 percent in the autumn – which is a record high – the Bank of England warned earlier this month that energy bills would once again rise this October by as much as 40 percent, taking the average bill to more than £2,800 per year.
