Chancellor Jeremy Hunt has announced in the Spring Budget that the current level of government funding to help protect people from higher energy bills will be extended for three months.
The Energy Price Guarantee (EPG) is a temporary measure that caps energy bills for typical households at around £2,500 a year. Before the EPG was introduced in October 2022, there was already a measure in place to limit energy bills called the Energy Price Cap. Under this measure, the average annual gas and electricity bill would have been £4,279.
The government’s Energy Price Guarantee funding was due to be reduced from this April, by £500, so average energy bills were set to rise to £3,000 annually. But the three-month extension means the increase won’t come into effect until July, when it’s expected that lower wholesale gas prices will lead to reduced energy bills.
Currently the Energy Price Guarantee is set to replace the Energy Price Cap until April 2024.
This will bring a typical household energy bill in Great Britain for dual-fuel gas and electricity down to:
- around £2,500 per year in Great Britain
- around £2,109 per year in Northern Ireland
The energy industry is working to update customer tariffs and notify customers of any new rates as soon as practically possible. Due to the limited number of days before 1 April, there may be implementation delays affecting a small number of customers.
If your tariff was not updated in time, your energy supplier will provide the appropriate correction for any 1 April inaccuracies as soon as possible after this date.
Is the Energy Price Guarantee the maximum amount you’ll pay for energy bills?
You’ll always pay for the energy you use, regardless of what the cap is set at.
You might pay less, but you could also pay more than the cap of £2,500 a year, because it refers to a ‘typical’ household with ‘average’ energy use.
What you pay under the Energy Price Guarantee will be determined by how much energy you use, the type of tariff you’re on, and how you pay your bill. And prices vary from region to region within the UK, according to rates set by Ofgem, because transport costs to deliver gas and electricity are taken into account.
By the end of June, the EPG will have saved a typical household in Great Britain around £1,100 since the scheme began in October, compared to undiscounted energy prices under the price cap.