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The cost-of-living support package: What it means for you

Rishi Sunak announced households will receive a £400 discount on energy bills (PA)
Rishi Sunak announced households will receive a £400 discount on energy bills (PA)

Chancellor Rishi Sunak has announced a series of payments to UK households struggling with the deepening cost-of-living crisis as he confirmed a temporary windfall tax on oil and gas giants.

Here is what the package means for you.

– Households will receive a non-repayable £400 energy grant

Households in England, Scotland and Wales will receive a £400 payment to help offset the soaring increase in energy bills from October.

All households with a domestic electricity connection will be automatically eligible for the grant.

Bill payers will not need to contact their energy company as the grant will be automatically applied to every household bill in October.

Direct debit and credit users will have the money credited to their account, while those with pre-payment meters will have the money applied to their meter or paid via a voucher.

It replaces the £200 loan announced by the Chancellor earlier this year and will not need to be repaid.

– Around eight million of the lowest income households will receive £650

Mr Sunak said the one-off cost-of-living payment for around eight million households on means-tested benefits will be sent direct to their bank accounts.

The Department for Work and Pensions (DWP) will make the payment in two lump sums, the first from July, the second in autumn, with payments from HMRC for those on tax credits following shortly after.

The payments will be sent straight to people’s bank accounts.

Across all the support, almost all of the eight million most vulnerable households will in total receive at least £1,200, Mr Sunak said.

– What about pensioners?

More than eight million pensioner households in receipt of winter fuel payments will be given an extra “pensioner cost-of-living payment” of £300.

Combined with an additional discount on energy bills, pensioners are at least £500 better off following Thursday’s announcement. They could receive a total of £850 in support this year, assuming they qualified for the council tax rebate announced earlier in 2022.

Mr Sunak stressed that pensioners were “disproportionately impacted” by higher energy costs due to being less likely to be able to top up their income through work, and faced higher energy costs from spending more time at home.

– Those on disability benefits will receive an extra £150 payment

The six million people who receive non-means-tested disability benefits will be sent an extra one-off disability cost-of-living payment worth £150 from September.

Mr Sunak said many within this group will also receive the £650 payment, taking their total cost of living help to £800.

– What do I need to do to make sure I get my payment?

Mr Sunak said the payments will not require any additional form-filling and will be paid via existing account set-ups.