How will the UK's energy costs drop starting in October?

Every person who pays an energy bill will start receiving a rebate in October to help offset the cost of staying warm this winter.

The decision was made public in May by the then-chancellor, Rishi Sunak, and confirmed this week as part of Liz Truss' cost-of-living measures.

The reduction, costing £400, will be automatically paid in six instalments from October through next March to homes in excess of 29 million. Both applying for the money and repaying it are not required of you. In October and November, you'll get it in instalments of £66, and then from December through March, you'll get it every month at a rate of £67.

However, even though the majority of homes will receive the money, your energy provider has the discretion to choose how to give the money to its clients. Others will treat it as a bill credit or a direct debit discount, while some will deposit the instalment payments directly into your bank account.

If you change providers between October 2022 and March 2023, your new supplier will still give you your discount. Your discount will be applied to the new payment method if you decide to alter how you pay your bill.

The majority of energy providers have disclosed how their clients would receive the money, while Octopus and Utilita are two examples where specifics are still hazy.

Here are a few handpicked suppliers we have found.

British Gas

Direct debit: Your direct debit will be processed as usual, and you will receive the rebate over the course of six months as a credit to your bank account. If your monthly direct debit is less than the rebate amount, the difference will be credited as a credit to your energy account and the direct debit amount reimbursed to your bank account. For instance, if your monthly direct debit is £60, you would receive a refund of £60 to your bank account and receive the remaining £7 to pay for your energy.

Payment on receipt of bill: Every month, your discount will be applied to the balance on your account.

Smart prepayment meter: Your discount will be added to your metre each month in a manner similar to topping it up.

Traditional prepayment meter: You will receive your discount in the form of vouchers, which you may use when you top off as usual. Your metre payments will return to normal once you have fully received the discount.

E.ON and E.ON Next

Direct debit: Depending on their tariff, E.ON treats consumers who pay by direct debit differently. Your rebate will be subtracted from your monthly bill if you are on a fixed energy tariff. The company will lower payments to £0 and add the extra as an account credit if your payments are less than £66/67. The refund will be added as a credit to your account each month if you pay your normal variable rate by direct debit, and any unused credit will be carried over to the following month.

Payment on receipt of bill: Payment upon receipt of invoice: During the first week of the month, funds will be automatically credited to your energy accounts.

Smart prepayment customers: The funds will be split between your gas and electricity metres and credited straight to your metre as a top-up in the first week of each month.

Traditional prepayment customers: You will receive vouchers within the first week of each month. These won't be redeemable anywhere else besides the Post Office.

EDF

Direct debit: Customers who pay their bills on a regular basis via direct debit will continue to do so. After making a successful bill payment, they will then get the discount in cash directly into their bank account.

Payment on receipt of bill: In the first week of every month, your energy account will be automatically credited with the energy rebate.

Smart prepayment meter: Within the first two weeks of the month, you will automatically get the discount as a credit on your device.