Energy price guarantee: What help is there for gas and electricity bills?

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Energy bills for a typical household in Britain will remain at £2,500 until the end of June, the government has announced. They had been due to rise to £3,000 a year from April.

However, the £400 discount on bills which most households received this winter will not continue beyond March.

What are the energy price guarantee and energy price cap?

When prices soared after Russia's invasion of Ukraine, the government announced a limit on the amount households could be charged for each unit of energy they use.

This energy price guarantee means bills for a typical household for gas and electricity are about £2,500 per year.

That maximum limit had been scheduled to rise to £3,000 a year from April, but the government has announced that it will continue at the same level for the next three months. The chancellor says this will save the average family £160.

The guarantee is scheduled to be in place until April 2024.

Prices will then be controlled by the return of the energy price cap, which is set every three months by Ofgem, the energy industry regulator.

It confirms the maximum price suppliers can charge households per unit of energy on a standard - or default - tariff in normal circumstances.

What if I'm on on a prepayment meter?

As well as an extension to the energy price guarantee, the government also promised to bring prepayment energy charges in line with those for direct debit customers.

This should save households about £45 a year on their energy bills from July.

Do I live in a typical household?

The calculations for a typical household are based on a direct debit customer using 12,000 kWh (kilowatt hours) of gas and 2,900 kWh of electricity a year.

A kilowatt hour is a unit of energy used to calculate your bill.

However, most households aren't typical.

Bills are based on how much energy you actually use, which depends on the number of people, the type of property and its energy efficiency.

What extra support will be available?

The government has already announced that some groups across the UK will receive further help from April:

  • £900 to households on means-tested benefits - paid in three instalments in spring, autumn and spring 2024
  • £300 for pensioner households
  • £150 to people on certain disability benefits

When will energy prices come down?

In recent months global energy prices have been falling, and experts predict cheaper prices for households later this year.

Analysts at Cornwall Insight think Ofgem's energy price cap will fall to £2,153 in July, and remain close to that level for the rest of the year.

That would make the government's energy price guarantee redundant by July.

Cornwall Insight says at this point households might once again be able to shop around for more competitive energy deals.

What else is being done to reduce bills?

A scheme running between November and March rewards households and businesses using less peak-time electricity.

Customers need a smart meter to take part.

People who don't use use high-energy appliances such as washing machines during a set hour of each test day will get up to £3 per kilowatt hour off their bill.

What help are businesses getting?

  • businesses get a discount based on a "government supported price" of 21.1p per kWh for electricity and 7.5p per KWh for gas
  • organisations on fixed price contracts are eligible if their deal started after 1 April 2022
  • those on variable tariffs receive an automatic discount for each unit of energy used
  • the savings began to appear in November's bills (backdated to October) and are automatic

The scheme applies to all non-domestic energy customers in England, Scotland and Wales, with a parallel scheme in Northern Ireland.

Unlike domestic customers, businesses were only promised help for six months until March 2023.

Support for firms after this will be much less generous.

Heavy energy-using sectors, like glass, ceramics and steelmakers, will get a larger discount than others.

Image source, Getty Images

What help have people already had?

Those in Northern Ireland are receiving a single payment of £600, more than in the rest of the UK, because of the widespread use of heating oil.

Eight million low-income households who get certain benefits or tax credits have received £650 in two payments.

Pensioner households got £300 and some disabled people were paid £150.

This help was being partly funded by a temporary windfall tax on oil and gas companies.

Vulnerable families can also claim help through the Household Support Fund, and the Warm Home Discount scheme.