The Department for Business, Energy and Industrial Strategy has unleashed more details about the £200 energy bill loan that will be added to more than 28 million electricity accounts across the United Kingdom in October.
Ofgem’s energy price cap came into force on April 1, driving annual consumption on typical, standard tariffs up by £693 to £1,971 per year, while homes on prepayment meters will see an increase of £708 to £2,017.
The UK Government explained that energy bills were increasing because it’s more costly for the companies who supply our energy to buy oil, coal, and gas, over the last year, the cost of gas alone had quadrupled.
The reasons gas prices are skyrocketing are global both in global demand for energy from a long cold winter last year and increased demands during the coronavirus pandemic.
In October, £200 will be credited to every electricity account to help offset the increase in bills. It’s not optional and will be repaid over five years beginning in April 2023.
However, a petition calling for consumers to be given the right to refuse the £200 energy levy, it’s not a loan, has received more than 10,000 signatures of support, which means it has passed the threshold to trigger an official response from the UK Government.
The UK Government will also be undertaking a consultation shortly seeking opinions from all areas of society about how best to implement this scheme.
Everything that you need to know about the £200 energy loan can be found on the GOV.UK website.
The UK Government is providing a package of support worth £9.1 billion from 2022 to 2023 which includes the Energy Bills Support Scheme.
Through the scheme, domestic electricity consumers in the United Kingdom will receive a £200 reduction in their electricity costs from this October.
The guidance on GOV.UK states that it’s fair to spread the costs of the reduction as widely as possible so that no one pays more than £40 per year through the levy. Therefore, all domestic electricity customers will pay a charge in the coming years.
All homes with a domestic electricity connection will be automatically eligible for the £200 bill reduction.
Customers do not need to apply for the £200 support scheme as the Government expects electricity suppliers to apply the reduction automatically to bills from October 2022.
According to the site, it said that they’re working hard to design the delivery of this but there might be some variation in how a household might actually receive the benefit, depending on how they pay for their energy, for instance, whether they pay by Direct Debit or on a prepayment meter.
However, there’s been a petition asking for energy customers to be given the right to refuse the £200 loan, which will be credited to all electricity accounts in October. The petition has now passed the signature threshold which triggers an official response from the UK Government.
The response threshold is 10,000 signatures and the ‘Allow consumers the right to refuse the £200 energy rebate’ petition, created last month by Sharron Espin, has now received more than 10,500 digital signatures of support.
The petition reads: “Stop forcing people to accept a loan for energy without the right of refusal. This will put more strain on many financially and mentally.”
It continues: “Make it fair for people and research a better payment plan that doesn’t discriminate against children leaving home and relationship breakdown.
“They [energy firms] will make a lot of money by charging £40 per annum to every consumer even if that consumer didn’t have this £200 loan, eg- child at home goes to uni and now owes £200 they didn’t borrow as they were not the billed consumer at the time the loan was issued, ditto to relationship breakdown, both parties will be paying the whole amount even though they live apart ergo £200 borrowed £400 repaid.”
Many people expressed concern over the £200 loan on social media following the announcement in February and reached out to consumer champion, Martin Lewis, for guidance on how to reject the money.
THE MONTHLY MOSQUITO 