£400 energy payment: a faff for those with ‘non-smart’ prepayment devices

interactive investor warns consumers to remain vigilant against scammers amid the roll-out of government cost-of-living support schemes.

The government has today announced how all households in England, Scotland and Wales will receive £400 to help with rising fuel bills this autumn.

Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The payment of the energy bill grant will be seamless for consumers who pay their energy bills via direct debit and those with ‘smart’ prepayment devices. They will see an automatic deduction off those bills. 

"However, it will be a bit of a faff for those with older ‘non-smart’ prepayment devices. This cohort will not get this money automatically. Instead, they will receive an energy bill discount voucher in the first week of each month, via text, email or in the post. They then would have to redeem these in-person at their usual top-up point, such as a local Post Office or a shop which offers PayPoint or Payzone.

“It is important to be extra vigilant and be wary of scams amid the roll-out of various government cost-of-living support schemes. As we saw during the pandemic, there are no depths unscrupulous individuals won’t sink to in order to swindle cash from unsuspecting victims. Households will never be asked for their bank details to receive the energy bill grant, and those with a domestic electricity connection will not need to apply.

“Every little helps when battling the onslaught of inflation, but the multi-billion energy support package announced in May is already out of date, with some sections of the energy industry predicting that the energy price cap could rise by £3,420 in October - a much higher sum than the £2,800 predicted in May by Ofgem. Prices could soar further still by an additional £500 for the month of January alone.

“This winter is set to be the bleakest when it comes to energy bills in a generation. The energy bills situation is already beyond crisis point for many of the most vulnerable members of society and the expected price cap rise is set to push more and more people into fuel poverty and could force households to choose between 'eat or heat.'

“The government’s cost of living support measures will not stretch far enough to shield the most vulnerable members of society from the eye-watering price rises from all corners. With the worst yet to come, it remains important to take steps today to bolster financial resilience now to give you some peace of mind in the coming months.

“Those struggling with their finances needn’t suffer in silence. Seek help and support – talking about money issues is the first step towards a solution. Those worried about being unable to meet payment obligations should contact their providers for support.”

Key points:

• All households with a domestic electricity connection in Great Britain are eligible for the £400 discount. There is no need to contact energy suppliers concerning this.
• The £400 discount will be administered by suppliers and paid to consumers over six months with payments starting from October 2022, to ensure households receive financial support over the winter months.
• Households will see a discount of £66 applied to their energy bills in October and November, rising to £67 each month from December through to March 2023.
• The discount will be provided on a monthly basis regardless of whether consumers pay monthly, quarterly or have an associated payment card.