Martin Lewis: How the new flat rate £200 energy bill loan really works

Cranberryberry

MWT said:

Cranberryberry said:

What happens if you change supplier or move home? What if you move from being an energy customer to not (eg by moving in with someone else). Can you extract the £200 via rebate?

And what if you have separate gas and elec suppliers? I which gets the £200 

It will be applied to the electricity account only.

If you close your account the usual rules will apply and you'll get a refund of the balance.

So some will be able to get their £200 and remove themselves from paying the £40 (eg if they move out of the country?) 

wakeupalarm

Cranberryberry said:

MWT said:

Cranberryberry said:

What happens if you change supplier or move home? What if you move from being an energy customer to not (eg by moving in with someone else). Can you extract the £200 via rebate?

And what if you have separate gas and elec suppliers? I which gets the £200 

It will be applied to the electricity account only.

If you close your account the usual rules will apply and you'll get a refund of the balance.

So some will be able to get their £200 and remove themselves from paying the £40 (eg if they move out of the country?) 

Or if they die from hunger or freezing.

This Government will probably sell it as an achievement of saving £200 pounds for thousands of pensioners who no longer have to pay it back

Kyresa

kara_p_uk said:

Can someone help me understand this better?
Martin says in his video the bill will go up by £40 a year, does he actually mean there is a repayment to the value £40 per year on top of the usual bill rather than the bill will go up 40/year? 
Otherwise If the bill goes up £40/year say my bill is £1000/year. 

April 23 £1040 (I have paid back 40 so 160 remains)
April 24 £1080 (I have paid back £80 so £80 remains)
April 25 £1120 (I have paid back £120 so more than the £200?)

he must have meant an additional payment per year right?

April 24  -   200 - 80 is 120, not 80.... 

FreeBear

QrizB said:

Tigsteroonie said:

I hope that's a mistake right there - surely it's "from the following April and for four years after that ... increased by £40 a year". April and four years after makes five payments which would equal £200. April and five years after makes six payments which would equal £240.

No, the text is right. There is no £40 payment; there's intended to be a £40 increase to your annual bill which you will pay over the year, roughly 11p/day, for five years (from April 2023 to April 2028).

How are they going to collect from those who have opted for a two year fixed tariff ?

tux900

FreeBear said:

How are they going to collect from those who have opted for a two year fixed tariff ?

All energy contracts, including fixed term deals, will include allowances to make necessary changes arising from new laws, legislation, tax etc. 

facade

FreeBear said:

How are they going to collect from those who have opted for a two year fixed tariff ?

The charge will be allowed by that clause that permits them to amend the fixed prices to account for VAT and other tax changes.

molerat

FreeBear said:

QrizB said:

Tigsteroonie said:

I hope that's a mistake right there - surely it's "from the following April and for four years after that ... increased by £40 a year". April and four years after makes five payments which would equal £200. April and five years after makes six payments which would equal £240.

No, the text is right. There is no £40 payment; there's intended to be a £40 increase to your annual bill which you will pay over the year, roughly 11p/day, for five years (from April 2023 to April 2028).

How are they going to collect from those who have opted for a two year fixed tariff ?

If it is an OFGEM imposed levy the T&Cs will allow it to be added to the daily charge irrespective of being on a fixed deal.

savers_united

It does not matter what tariff your on, the £40 per year will be added to the SC. Just in the same way if Vat had been cut a fixed tariff would have been reduced by 5% and likewise increased if vat went up. 

FatherTireseus

FatherTireseus said:

I wonder if anyone will bring a legal challenge to say they shouldn’t repay the ‘loan’ because they never had an electricity account in October 2022 and never benefitted in the first place?

GingerTim said:

Has anyone brought a legal challenge to say they shouldn't contribute to the Warm Home Discount, as we all do, because they have never themselves benefited from it?

MWT said:

I'd love to see how that would be framed...

We are all going to be paying a levy, just like we do to cover the WHD or the costs of the SoLR scheme, as someone who has never been a customer of a failed supplier, or in receipt of WHD I should have quite a legal case to pursue

Well, if I'm honest my original comment was a bit tongue in cheek.  But (gazes into crystal ball) I'd put money on someone, somewhere in two or three years time, angrily posting on this forum that they have just bought their first house and they've got a £40 charge on the leccy bill and what's that all about and who do they complain to.

I guess the difference between WHD, or the SoLR scheme is, yes we're all paying for it.  But it's not visible on our bills as a separate line item, just wrapped into the costs.  I bet there are a good number of people who get their energy bill, pull a face at the amount, pay it and have no idea it covers a whole host of social and environmental costs.  But once they start seeing £40 charges, particularly if they never had the £200 credit in the first place, that's likely to cause more wailing and gnashing of teeth.

Tigsteroonie

QrizB said:

Tigsteroonie said:

I hope that's a mistake right there - surely it's "from the following April and for four years after that ... increased by £40 a year". April and four years after makes five payments which would equal £200. April and five years after makes six payments which would equal £240.

No, the text is right. There is no £40 payment; there's intended to be a £40 increase to your annual bill which you will pay over the year, roughly 11p/day, for five years (from April 2023 to April 2028).

No. Martin clearly says "April [2023] and the five yeras following". That would be 2023 + the five years following, so 2023 + 2024 (one year following) + 2025 (two years and so on) + 2026 + 2027 + 2028. That totals six payments. 

He doesn't actually say whether itll be levied as a one off or a drip payment. Therefore I still maintain he is unclear, he is suggesting that there will be six repayments.