Ten things you need to know about the £200 energy loan – from repayment to unsubscription
The government has released details of how its £200 per household energy bill support scheme will work, including no extra cash for struggling Britons – don’t call it a loan
The British will reimburse the Government energy loan of £200 for five years, £40 a year, according to the plans set out today.
The government wants to make a £200 per house cut on energy costs this year to help skyrocketing energy bills .
The program will see the government give money to energy companies, who will then apply it as a reduction in bills.
However, the money will have to be refunded.
Today the government launched a consultation on what the details of the Energy Bill Support Scheme will look like.
The government still insists the £200 loan is a grant, not a loan – as it charges no interest.
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The Collins dictionary defines a loan as “a sum of money that you borrow”.
Government money of £200 seems to qualify as you will have to pay it back in the form of higher energy bills.
MoneySavingExpert founder Martin Lewis even described the system as “loan-not-loan”.
Last week, Energy Minister Greg Hands was mocked by a BBC TV audience for refusing to call the program a loan.
The government stepped up its efforts in its consultation today and said: ‘Reducing the energy bill is not a loan. There will be no interest due, no debt attached, and it will not won’t affect your credit rating. It’s now a subsidy with a levy on future bill payers.”
Here are 10 things you need to know about how it works and what the government is planning.
1) Domestic electricity customers in Britain will get a £200 reduction on their electricity costs from October.
2) Repayment charges will be capped at £40 per year, meaning households will repay the loan for five years.
3) The reduction will automatically apply to energy bills from October 2022.
4) How you get the £200 loan may vary depending on whether you have a prepaid meter or are paying by direct debit.
5) All customers in England, Scotland and Wales will receive the £200. Northern Ireland received enough money to launch its own scheme.
6) If you live in a park house or multiple occupancy house you may not receive the £200. This is because it will be paid to the person named on the invoice, in these cases it is a landlord, who passes the cost on to the tenants. The government is still trying to solve this problem.
7) You can’t opt out and must take the £200 even if you don’t want to.
8) If you change energy supplier during the five-year payback period, you will pay any cash balance back to your new energy company.
9) The government still refuses to give energy bill reductions except for the £200 loan and a £150 council tax rebate .
10) The exact operation of the program will be finalized and published by the government this summer.