Details of how the £400 energy bills discount for households will work have been announced by the government.

The £400 discount, administered by energy suppliers, will be paid to millions of households over the course of six months starting in October, to ensure consumers receive financial support throughout the winter months.

It comes as people across the country struggle with soaring energy prices and spiking inflation in the worst cost of living crisis for decades.

Despite the £400 discount announcement, MPs have warned that millions of people face falling into “unmanageable debt” if the Government doesn’t update its energy support package before winter.

Setting out its Energy Bills Support Scheme, the government said those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills.

Meanwhile, traditional prepayment meter customers will be provided with Energy Bill discount vouchers in the first week of each month, issued via SMS text, email or post, using the customer’s registered contact details.

These customers will need to take action to redeem these at their usual top-up point, such as their nearest local PayPoint or Post Office branch.

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Questions over how the discount will work – for example for people whose bills are included with their rent – have swirled since the policy was announced earlier this year.

Read more: Energy price cap expected to double in January, experts warn

Chancellor Nadhim Zahawi, said: “We know that people are struggling with rising energy prices which is why we have taken action with support over the winter months to help ease the pressure on household budgets.

“This £400 off energy bills is part of our £37 billion of help for households, including eight million of the most vulnerable households receiving £1,200 of direct support to help with the cost of living.”

Households will see a discount of £66 applied to their energy bills in October and November, rising to £67 each month from December through to March 2023.

The non-repayable discount will be provided on a monthly basis regardless of whether consumers pay monthly, quarterly or have an associated payment card.

Households most in need will be eligible for further support in addition to the energy bill discount, including:

• £650 one-off Cost of Living Payment for around 8 million households on means tested benefits
• £300 one-off Pensioner Cost of Living Payment for over 8 million pensioner households to be paid alongside the Winter Fuel Payment
• £150 one-off Disability Cost of Living Payment for around six million people across the UK who receive certain disability benefits

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