Martin Lewis explains who will get £200 energy bills discount as costs soar

The new scheme was announced last week

Shortly after energy prices spiked last week the government announced rebates to help people cope with the cost of living crisis, but many were left confused about how it would actually work. Financing guru Martin Lewis has since stepped up to explain exactly how the £200 energy bill rebate will work - but first let's recap. Ofgem on Thursday increased the price cap by 54 per cent from April, meaning those on default tariffs would be hit with an increase of £693 to £1,971 a year. For prepayment customers, it was worse, with bills increasing £708, to £2,107.

Read more: Martin Lewis issues stark advice for households after £700 energy bill hike

In response, the government pledged to give UK homeowners a £200 discount on their energy bills. But, Chancellor Rishi Sunak said the discount would be applied to October's energy bill, and starting from 2023, you'll need to pay £40 back annually for five years. People were left confused. "There is no choice about it. It is not optional and it is going to happen automatically on every single bill," Lewis explained in a video released earlier this week, adding that prepayment customers will receive the rebate through the smart meter, or via voucher. https://twitter.com/MartinSLewis/status/1491052472328425473 He continued: "Then from the following April, and for five years after that, you will then have your bill automatically - without choice - increased by £40 a year. That is how it will work." Lewis went on to detail how people will still be required to repay the loan even if they have moved out. This includes living with parents, as even though you personally didn't get the money, your yearly bill upon leaving will still be £40 higher. "You'll simply get your energy bill and it will be higher because of this levy and the one this October will be lower," he said.

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