Exclusive: One in four people have no idea about government’s £200 energy bill 'discount'

Britain's Chancellor of the Exchequer Rishi Sunak hosts a press conference in the Downing Street Briefing Room on February 3, 2022. - The UK government on Thursday stepped in to help the hardest-hit households struggling with the rising cost of living, announcing a £9 billion package to offset soaring energy bills. It followed an announcement by that energy regulator that the price cap on how much suppliers can charge consumers will jump by 54 percent due to soaring wholesale gas prices. (Photo by JUSTIN TALLIS / POOL / AFP) (Photo by JUSTIN TALLIS/POOL/AFP via Getty Images)
The chancellor's £200 repayable interest-free "rebate" and "discount" on energy bills to tackle soaring gas prices has been criticised for being confusing. (Getty)

A quarter of people have not heard of Rishi Sunak's flagship cost-of-living policy that will hand a £200 "rebate" to every household in a bid to tackle the energy bill crisis.

Amid soaring wholesale gas prices, Ofgem announced last week that the energy price cap will increase by 54% - meaning the average UK household's annual energy bill will rise by £693 to £1,971 on 1 April.

Following the announcement, the chancellor announced that the government would be bringing in the £9.1bn "Energy Rebate Scheme" to help struggling households.

Read more: Three major changes that may affect your energy bills

The scheme is made up of two parts:

  • Households in bands A-D will receive a £150 discount on their council tax

  • Every household will receive a £200 interest-free repayable 'rebate' or 'discount' on their energy bills. All households will then repay the £200 as an extra £40 on their energy bills for five years from 2023.

The announcement has triggered widespread confusion, with experts questioning how the £200 payment can be regarded as a "rebate" when many households will effectively be paying it back. One government minister has even referred to it as a "loan".

Consumer champion and Money Saving Expert founder Martin Lewis has said that the plan is effectively two separate "levies". The first will see all bill payers given a £200 payment; the second will see bill payers pay an annual sum of £40 for five years - regardless of whether they got the initial payment.

New Savanta ComRes polling exclusive to Yahoo News UK suggests the public are confused, too.

brits haven't heard of £200
A quarter of Brits haven't heard of Rishi Sunak's £200 energy discount. (Yahoo News UK/Savanta ComRes)

Some 23% of Brits are unaware of the scheme altogether, with 18-34 year olds most likely to be in the dark.

One in four are unaware that the discount on energy bills has to be paid back, with the figure rising to one in three for 18-34 year olds. In contrast, just 13% of over 55s were unaware of this.

The poll suggests that Sunak needs to work harder to make sure the public, especially younger people, are aware of the scheme and how it is going to affect their finances.

Lewis has expressed concern about the government's messaging on the issue, and has criticised the language used by the Treasury.

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"[I've] been trying to work out what to call the controversial £200 loan coming on energy bills in October, as I'm writing," Lewis tweeted on Tuesday.

"Bill-credit, rebate and more have all been used. Not truly describe it correctly.

"Then it finally came to me. I'm calling it the 'loan-not-loan'."

Money saving expert and consumer champion Martin Lewis has suggested describing the £200 as a "rebate" is msileading, (@MartinSLewis/Twitter)

Read more: Cost of living: Three key dates that will affect the cash in your pocket

On Friday, he called for the scheme to be scrapped after YouGov polling suggested people did not want to be forced to pay back a £200 they had not asked for.

FullFact told Yahoo News UK the £200 arrangement was confusing, and could not truly be referred to as a 'rebate' as it is repayable.

"A rebate usually refers to money returned to a consumer or taxpayer after they have paid for a product or paid tax," a spokesperson said.

"In this sense, the energy bill scheme is not a rebate because people will still have to pay their full energy bill, just over a longer time period. It is more akin to a payment plan than a rebate."

When asked by Yahoo News UK how the scheme could be classified as a 'rebate', the Treasury repeated that the £200 was a rebate and a discount. However, it appears the public disagree.

rebate not pay back
Most people think a rebate is something you don't pay back. (Yahoo News UK/Savanta ComRes)

On the question of what constitutes to a rebate, more polling exclusive to Yahoo News UK by Savanta ComRes reveals more than two thirds believe a rebate is "a partial refund for something you can keep".

Just 22% said a rebate was "a partial refund for something that you have to pay back eventually", with 9% of adults responding to the survey with "don't know".

In response to the polling, a spokesperson for the Treasury said: "We understand that people are concerned about pressures on household budgets which is why we have set out a generous package of support, with a non-repayable £150 council tax rebate from April and a further reduction of £200 on energy bills in October.

“The energy bills reduction is not a loan to households or suppliers and will help people manage the increase in energy bills by spreading the increased costs over a few years, so they are more manageable.”