What does the new energy plan mean for you?

Here are the key highlights and how they might impact you.

Cost-of-living payments set to continue

• The £400 rebate (equivalent to £66 per month) being provided to all homes this winter will continue. When set against the Energy Price Guarantee this brings the average annual energy bill down to £2,100.
• Payments to those on benefits (£650), pensioners (£300) and those with disabilities (£150) will continue this year, and possibly next.
• The first instalments of these payments have been made automatically to those the government understands qualifies. Anyone who thinks they are entitled to the help, but has not received it by the middle of September, should contact the office that pays their benefit or tax credits.

No penalty for switching from fixed energy deals

• Those on fixed energy deals, can either stay on them, or can leave and switch to the new state subsidised tariffs with no exit penalties.

Support for businesses

• Many businesses were reporting projected increases in energy costs of more than 500%, which is particularly worrying with many long-term business energy deals due to expire in October.
• Businesses and other non-household energy users (including charities and public sector organisations like schools) will now get an equivalent level of support, with bills capped for six months (not the 2 years many had expected).
• How exactly that support will work is yet to be fully detailed by the government.
• After 6 months there will be ongoing support provided, particularly for vulnerable industries.
• There will be a review in three months’ time to consider where this should be targeted, though further details have yet to be confirmed.

No VAT reduction

• Despite wide speculation, there will be no reduction to the headline rate of VAT to curb inflation and help with the cost of living. This may however be considered in the future.