The facts on fuel prices
Government intervention will help – a bit, says Paul Lewis
From 1 October the price for each unit of gas or electricity you use in England, Scotland, and Waleswill rise by 40% for gas and 20% for electricity (far less than the 80% overall rise announced in August).The change is part of the Energy Price Guarantee announced by Liz Truss on 8 September, which means prices will be frozen at those new levels until 1 October 2024. Standing charges will increase by between 1% and 5%. (More details on that next week.)
Every individual who has an electricity account will also get the reduction in their bill of £400 that was announced in May. It will be paid in six instalments, £66 in October and November and £67 for each of the next four months. If your bill is less than the instalment, the surplus will be carried forward as a credit. It only applies to electricity bills, and will not have to be repaid.
Normally the discount will be given by reducing your direct debit. But if you pay your bill as it arrives, the money will be deducted from your account each month. Customers with a smart prepayment meter will see the credit automatically added to their account in the first week of every month. People with older prepay meters who charge up a card or key at a shop or post office will be sent a monthly voucher by text or in the post, and must take that to their Paypoint or PayZone to get the money added.
About half a million people (including many students), who pay rent to a landlord that includes their electricity, will not get the discount directly. They will have to ask their landlord for it. The Government says landlords should pass it on, but how that will be enforced is not clear.
People who live in Northern Ireland will get the £400 payment, but the lack of an Executive has delayed the process.
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Every council will have a special hardship fund for people who miss out or who need more help with the cost of living. Contact your council and ask how to apply.
Paul Lewis presents Money Box on Radio 4. To read more of his advice, see radiotimesmoney.com QUESTIONS? Send any questions to Paul.Lewis@radiotimes.com.