British households will receive a £400 grant in October to help ease the cost of spiralling energy bills, as Chancellor Rishi Sunak has announced a significant increase in support for vulnerable households and the elderly.
Families are struggling amid the greatest cost of living crisis in a generation – and the majority of households will receive further support with today's announcement., Mr Sunak said.
The elderly, disabled, and low-income households will receive targeted support and pensioners will see their winter fuel payment boosted later this year. Other families will receive more support to pay for sky-high energy bills.
In the autumn, more than eight million pensioners who receive the winter fuel allowance will be paid a one off "pensioner cost of living" payment of £300. The Chancellor said the elderly often incur higher energy bills as they spend more time at home and keep their heating on for longer.
The payment will be made directly to households in the same way they receive the winter fuel allowance.
Combined with an additional discount on energy bills, pensioners are at least £500 better off following the announcement today. They could receive a total of £850 in support this year, assuming they qualified for the council tax rebate announced earlier in 2022.
Earlier this year the Chancellor announced a £200 discount on energy bills applied in October for all bill payers. However, households would eventually need to pay this back from next year. He also said some households would receive a £150 council tax rebate that did not need to be repaid.
However, today it was announced that no household would have to pay back the original £200 discount and the rebate was doubled to £400.
Bill payers will not need to contact their energy company as the grant will be automatically applied to every household bill in October.
More than eight million homes who currently receive state benefits will be paid a one-off "cost of living" grant of £650. Households will not have to fill out any forms, and the payment will go directly into their bank accounts split between July and in the autumn.
Meanwhile six million people on disability allowance will receive a one off payment of £150 in September, which the Chancellor said would help offset the extra electricity many disabled people use on energy-intensive equipment in the home.
These direct cash payments will help one third of households and cost the Government £9bn. In total, vulnerable and low income households will receive £1,200 in additional state support this year.
Why is it happening now?
Regulator Ofgem announced this week that Britain's energy price cap will hit £2,800 in October, meaning households will pay 42pc, or around £830 more, than do now.
It will pile more pressure on to already struggling households and comes alongside an inflation rate of 9pc and higher taxes since last month.