The Government has announced an energy price guarantee which will limit a ‘typical’ energy bill at £2,500 a year. This news will come as a welcome relief for many households worried about the uncertainty of rising energy prices.
What is the energy price guarantee?
The Government has capped the typical household energy bill at £2,500 annually. The energy price regulator, Ofgem, had previously announced the energy price cap would be rising to £3,549 a year from October with further rises expected in January and April 2023.
The energy price guarantee means that the government has limited the maximum price energy suppliers can charge for each unit of energy you use. This means for a typical household using an average amount of energy, bills shouldn’t increase past £2,500 annually. The guarantee scheme will be valid until 2024.
Update 17/10/22: The new Chancellor of the Exchequer, Jeremy Hunt, announced that the Energy Price Guarantee scheme would be reduced from two years down to just six months. The guarantee will be reviewed in April 2023. The Chancellor said from April there will be “a new approach” targeting those in the most need.
Update 08/07/23: From 1 July, households without a pre-payment meter will no longer get an energy price guarantee discount on their gas and electricity bills. This is because the Ofgem price cap is lower than the Energy Price Guarantee level, meaning people will pay the rate set by the price cap. The Energy Price Guarantee will remain in place as a safety net until the end of March 2024, in case prices increase to over £3,000 per year.
When will the energy price guarantee start?
The guarantee will be in place from Saturday 1 October 2022.
Am I eligible for the energy price guarantee?
The energy price guarantee will be available for households in England, Scotland and Wales. Equivalent help will be available for those living in Northern Ireland. It will be applied automatically to your bills by your energy suppliers, you do not need to contact them.
Where can I get more help with energy bills?
Although the energy price guarantee will provide welcome certainty for many, it’s still an increase of £529 on the current price cap. That means that from October, the typical bill will still be double what it was a year ago. If you’re classed as vulnerable you may need to use more energy in your home to stay safe and well or if you’re a low income household you may struggle with this increase in bills despite the energy price guarantee.
If you’re concerned you won’t be able to afford to pay your energy bills over the winter or you’re already in debt, find out what support is available.
If you’re struggling with debt, check to see what CAP services are available in your area.