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

[Deleted User]

Ok. So could you take the £200 out of your account and keep it in a savings account, then next year take £40 out of that to then add to your electric bill?
Or drop your direct debit really low, use the £200 but put the money you would have used on the direct debit into a saving account? Or not ......

GingerTim

I expect so, but the effort in doing so will probably outweigh any piddling interest you might receive.

Given that it's not going to be credited until October, and that the price cap is going only one way, you are probably going to need it and best leaving it where it is.

EssexHebridean

If you’re in a fortunate enough financial position to be able to “not want” the £200, then I’d gently suggest that you are also unlikely to be unduly troubled by the extra £3.33 a month on your bills when payback time comes round. Think of it as a nice charitable thing to do - without you even having to lift a finger to actually donate only, buy some stuff for a foodbank or volunteer any time, by putting up and shutting up about the “loan-not-loan” as Martin is now referring to it, you’re helping the many MANY folk out there who are not in your comfortable financial position.  As for the argument about a “profit” being likely to be made - for every child moving out of home, there is likely to be a corresponding grannie, grandad, aunty or uncle who sadly dies. Nothing will be reclaimed from their estates because there is no personal debt. For every divorced couple, another will decide to move in together, meaning they only pay back one lot of £200 between them - because there is no personal debt. 

luvchocolate

EssexHebridean said:

If you’re in a fortunate enough financial position to be able to “not want” the £200, then I’d gently suggest that you are also unlikely to be unduly troubled by the extra £3.33 a month on your bills when payback time comes round. Think of it as a nice charitable thing to do - without you even having to lift a finger to actually donate only, buy some stuff for a foodbank or volunteer any time, by putting up and shutting up about the “loan-not-loan” as Martin is now referring to it, you’re helping the many MANY folk out there who are not in your comfortable financial position.  As for the argument about a “profit” being likely to be made - for every child moving out of home, there is likely to be a corresponding grannie, grandad, aunty or uncle who sadly dies. Nothing will be reclaimed from their estates because there is no personal debt. For every divorced couple, another will decide to move in together, meaning they only pay back one lot of £200 between them - because there is no personal debt. 

Most sensible reply to this very long thread 

wild666

Given the way prices are going I think the government have already stated the cap will go up by 20% in October, it will take a drastic decrease in energy prices for the price cap to fall or prices to stay the same up to October for no increase in the cap prices.

markin

marie_hc said:

MSE_James_F said:

Martin Lewis explains how a new £200 energy bill loan offered by the Government really works in his latest video. The initiative was announced this week in a bid to help households with the rising cost of living, following confirmation that typical energy bills will rise by £693 a year from 1 April. But there's lots of confusion about the loan, which MoneySavingExpert.com founder Martin debunks below.  

Read the full story here:
'Martin Lewis: How the new flat rate £200 energy bill loan really works'

Click reply below to discuss. If you haven’t already, join the forum to reply.

Hello  Not sure if I'm on the correct topic page. 

I am confused about Martins video about this £200 credit thing.  I understand my bill may be reduced or credited and we all have to pay a £40 levy per year for 5 years. 

 My query is why?  Why reduce bills why not just leave them as they are then no one has to pay £40.   
What is the point of it.  All the company's do  is keep the £200.  
Also what happens after the five years?  
Who has created this system.
Can Martin explain this or has he done so already ?

The story is that they were just going to give it to the energy companies but they didn't want the debt on their books, if true.

slenderkitten

Hi I've got a slightly different question here I'm going to moving out of this flat soon! I'm wondering when I leave here will the landlord then benefit from having this £200? There won't be anyone moving in after me! 

EssexHebridean

Yes, assuming the landlord takes over the hills when you leave, then they will. But then as they’ll eating for any power used at that point, that seems kinda fair, no? If you move to another property where you have an energy account prior to the payment being made,you’ll benefit there, instead. The loan is to take account of the increased bills over NEXT winter - not to cover what has already been used! 

slenderkitten

EssexHebridean said:

Yes, assuming the landlord takes over the hills when you leave, then they will. But then as they’ll eating for any power used at that point, that seems kinda fair, no? If you move to another property where you have an energy account prior to the payment being made,you’ll benefit there, instead. The loan is to take account of the increased bills over NEXT winter - not to cover what has already been used! 

I don't want them benefitting from the money after what they put me through they are in breach of a council works notice and 2 tribunal orders.  

[Deleted User]

GingerTim said:

To help those most in need, think of it as a universal Warm Home Discount, and the quickest way to get help to people who need it with their bills. It's a blunt instrument, but then so is our Prime Minister.

I needed this today, thank you 😂