How will the £400 energy payment work if you're on a prepay meter?

·3-min read

Households are set to receive a £400 energy discount by October to help out with rising bills.

Back in May, then-chancellor Rishi Sunak had announced he was doubling his planned energy bills rebate and offering a discount to homes with an electricity supply contract.

For people who pay by direct debit, this will be credited to your account. But what about people with prepay meters? And what if you pay your bills via your landlord as part of rent? People with second homes may also be wondering if they get the payment twice.

Our personal finance expert Gemma Godfrey has some answers...

How will the £400 energy payment work if you're on a prepay meter?

Households on a prepay meter, which are topped up to pay for energy, should have the £400 energy payment applied to their meter as a credit or get a voucher.

There are three things to watch out for.

Firstly, the type of prepay meter may affect the way the payment is received.

Secondly, it hasn't yet been clarified whether the payment will be received all at once or in instalments over a six-month period.

Will every household get £400 even if you own multiple properties? For example, those with second homes and holiday lets.

The way the scheme is currently set up, every home in the UK will get a £400 energy payment, even if it's a second or third home.

It is aimed to go to every household, regardless of need. This means that there are people set to receive the £400 payment multiple times.

Will I get £400 energy rebate if bills are included in my rent?

This is such a tough question and there's no easy answer.

You've identified the key issue with the £400 energy payment - that in some cases it relies on the goodwill of a landlord to pass it on.

The payment will only be made to households who have an electricity supply contract.

People that rent and pay the utility bills will get this payment directly. The problem arises if your rent includes bills, so your name is not on the utility contract and you do not directly pay them.

In this case, the only way to receive the £400 energy grant is if your landlord chooses to pass it on. They could either forward the payment to you or reduce the rent that month.

Either way, renters are at the mercy of landlords over whether they will receive any benefit.

There is no legal obligation placed on landlords and the government has recognised the issue on its website. They advise that they are "exploring the issue" as they "continue to develop the policy".

In the meantime, it could be worth discussing this with your landlord to see if they are willing to help. It's in neither of your best interests if you struggle to pay the bills.

Either way, it's a good idea to keep an eye out on further guidance from the government. They've advised that they are reviewing how the payment will be managed and guidance should come out over the summer.

Gemma is a business advisor, finance expert and TV host, an ambassador for the charity Surviving Economic Abuse, and a former boardroom adviser to Arnold Schwarzenegger on The Apprentice.

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