UP to 250,000 households in Britain are set to miss out on the government's £200 energy bill rebate because of how they pay for electricity.

Charity campaigners estimate that almost two million homes use old prepayment energy meters, which rely on customers topping up a key card at a shop or Post Office.

That means that the £200 rebate promised by chancellor Rishi Sunak earlier this month cannot easily be given to them, because it is automatically knocked off people's bills.

Without a bill that is paid after the energy has been used, the rebate can't be applied.

In the past, similar schemes have tried to target affected households by sending them money-off vouchers instead.

But when the government rolled out a rebate in 2014 and 2015, around 10% of households on the old-style meters did not redeem their vouchers, according to National Energy Action (NEA).

In some cases there were technical problems with the vouchers, but some vulnerable customers may also be concerned it might be a scam, NEA said.

Some vulnerable people also do not open their post or do not speak English as their first language, making it hard for them to understand what to do with the vouchers.

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"We know that when the government did this previously, many households on older prepayment meters couldn't benefit as much as those on the newer meters or paying by direct debit," Peter Smith, director of policy at NEA, said.

All energy customers will get a £200 discount on their energy bill from October.

But everyone will have to repay it in £40 instalments over five years starting from 2023, even those on prepayment metres, who will have it added to their standing charges.

The support is to help struggling Brits cover the cost of gas and electricity, as bills are set to soar £693 a year for around 22million consumers.

The 4.5million households with prepayment meters, many of whom are vulnerable, would be particularly hard hit by energy price rises, Mr Smith said.

It would collectively add an estimated £3billion to their bills each year – £200million more than households on standard direct debits.

Also half of the households on prepayment meters have an income of less than £18k a year, he pointed out.

He called the chancellor's measures "totally inadequate for the poorest households".

"We're really concerned that people will miss out on that benefit first of all, and then they'll still have to repay it through a really aggressive mechanism of administering the cost through the standing charge.

"This could prompt people to self-disconnect, where households that use prepayment metres just disconnected their energy supply because they're not able to pay their bill.

"They can no longer afford any credit for the meter so they simply don't use energy in the home. And that is awful, particularly for people with health conditions or children."

Campaigners are still hoping that the government recognise that prepayment meter customers won't have the means to pay the £200 back through an increase in their standing charges and are pressing the government to turn it into a grant.

Around 2.5million households have newer digital prepayment meters to which the £200 credit can be applied more easily.

Martin Lewis, founder of MoneySavingExpert, said on Thursday that more than half of 1,665 adults polled by YouGov on his organisation’s behalf would reject the £200 if given the choice.

A spokesperson for HM Treasury said: “We will consult with consumer groups and suppliers over the coming months to ensure pre-payment customers receive the £200 rebate from October in a way that is convenient for them, including by the methods already used by energy suppliers to deliver the warm homes discount."

If you are struggling to pay your energy bills, there is help available.

You can check which benefits you're entitled to using charities including Turn2Us, which provide a free service.

Energy suppliers also have hardship funds to help those who are struggling, so contact your supplier to find out if you are eligible.

There are also cold weather payments if it gets really chilly, and the warm home discounts or household support funds which may also help.

The government has also announced a £150 council tax refund targeted at low and middle income earners.

It's not directly aimed at lowering energy bills, but is designed to relieve some pressure off household finances, as council tax bills are also set to rise in April.

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