A three-month extension of government funding to help people manage higher energy bills was announced in the Spring Budget by Chancellor Jeremy Hunt.
A temporary measure called the Energy Price Guarantee (EPG) caps energy bills for typical households at around £2,500 per year.
Until October 2022, there was already a measure to limit energy bills, called the Energy Price Cap. Gas and electricity bills would have been £4,279 on average under this measure.
As a result, energy bills would increase to £3,000 annually due to the government’s Energy Price Guarantee funding being reduced by £500 from this April. It is expected that lower wholesale gas prices will lead to a reduction in energy bills in July due to the three-month extension.
Energy Price Guarantees are currently set to replace Energy Price Caps until April 2024.
Is the Energy Price Guarantee the maximum amount you’ll pay?
No matter what the cap is, you’ll always be charged for your energy usage. In addition to paying less, you might also pay more than the cap of £2,500 a year because it refers to an ‘average’ household.
Depending on how much energy you use, your tariff, and how you pay your bills, you’ll pay under the Energy Price Guarantee.
The price of gas and electricity varies across the UK according to rates set by Ofgem, because transport costs are factored in.