The UK government has announced a £15 billion support package to help families with the cost of living crisis.

Instead of the original Government proposal of a £200 loan to help with energy bills, this will now be replaced in favour of an energy bill discount of £400, which will be given to every household in the UK.

Ofgem, the UK’s energy regulator, estimates that typical household energy bills are set to rise by £800 in October, to £2,800 a year.

Chancellor Rishi Sunak also announced that one-off payments will be given to the most vulnerable – the elderly, those with disabilities, and those with the lowest incomes. Here is a breakdown of all the payments outline:

  • £150 tax rebate if you pay council tax and live in council tax bands A to D. If you pay by direct debit, this will be paid automatically into your bank account by September. If you don’t pay by direct debit your council will be in touch with you.
  • £400 energy bill payment for every household from October. Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher.
  • £650 cost of living payment to all households in receipt of means-tested benefits. DWP will make the payment in two lump sums – the first from July, the second in the autumn. Payments from HMRC for those on tax credits only will follow shortly after each to avoid duplicate payments.
  • £300 extra cost of living payment for eligible pensioners, on top of the Winter Fuel Payment in November / December.
  • £150 disability cost of living payment for people on eligible disability benefits in September.

If you’re eligible for a grant your council or provider will automatically carry out the payment or be in touch with you, you do not need to apply. For more information, click here.

  • Household Support Fund – To support households with essentials such as food, utilities, and clothing. This has been extended until March 23 and each local authority makes its own decision on who qualifies and how the funds are distributed. Please contact Newcastle City Council about this.

If you’re unsure whether a grant might apply to you, you can always speak to our Money Matters Team who are experts in money and benefits. They can also carry out a free benefits check to make sure you’re claiming benefits you may be entitled to, get in touch here.

How will this be funded?

In a move which Ministers previously rejected but was called for by Labour, the Liberal Democrats and the SNP, £5 billion is expected to be raised through what is called a windfall tax. This is a new one-off tax levy targeting some of the large fuel (oil and gas) companies that have reported huge profits. It’s estimated that these companies will temporarily pay a 25% Energy Profits tax levy.

The new measures will, in some way, benefit all our customers and you should receive the £400 discount from October. We’ll provide further updates when more information is available to us.

Beware of scammers

Councils are responsible for processing your rebate or grants (not Karbon) but they don’t ask for bank details over the phone – they will not ask for your name, number and sort code.