Energy price cap increase: How will the rebates work and do you qualify?

3 min Read Published: 03 Feb 2022

The chancellor of the exchequer, Rishi Sunak unveiled his plans to help millions of households that are set to struggle further with the increasing cost of living due to an increase in the energy price cap. Help comes in the form of a council tax rebate due to be applied in April this year and an energy rebate applied directly to energy bills in October this year. In this article, we explain the rebates in more detail including how much they are worth and who qualifies.

Help with rising energy bills - Energy rebates explained

Rishi Sunak announced a two-fold plan for households in order to offset an estimated £693 hike in energy bills from April this year for households in England, Scotland and Wales. The chancellor's plan will see millions of households receive up to £350 in the form of two different rebates and we explain each of these below.

Council tax rebate - How will it work and who will it benefit?

The council tax rebate offered by the government is to be applied to council tax bills in April of this year at a flat amount of £150 per qualifying household in England. The rebate will be applied to households that fall within council tax bands A to D. Those living in larger properties - falling within council tax bands E to H - do not qualify, however, local authorities have been allocated an extra £144m of discretionary funds to help those that are in need of extra help. Around £565m has been allocated to devolved nations providing them with an equivalent level of means to support people in Scotland, Wales and Northern Ireland.

How to check which council tax band you are in & to see if you qualify

If you don't know which council tax band you are in then simply enter your postcode into the official council tax checker tool. You need to be in council tax bands A to D to qualify for a rebate.

What if you don't pay council tax?

There is a separate pot of financial support available for those on low incomes who do not pay council tax and this will be handled by your local authority and dealt with on a case by case basis.

Energy bill rebate - How will it work and will it have to be repaid?

The energy bill rebate will amount to £200 for all domestic electricity customers and will be applied to bills in October this year. Energy suppliers will apply the £200 discount to electricity bills upfront in October. The chancellor's plans expect for this rebate to be recovered through consumers' energy bills over the course of five years starting in April 2023 by adding £40 to the bill each year.