The new Energy Price Guarantee – What you need to know

It seems we have a new name for the energy price cap. The price cap has been used for reasons outside of what it was originally designed for.

The new Energy Price Guarantee is a guarantee on unit rates and standing charges to ensure that the average household energy bills do not exceed £2,500 per year for the next 2 years. Here’s what you need to know.

Note all figures quoted are based on average or typical use. You may use more or less energy than this but check out this price cap guide for more information on how these are calculated.

  1. Whilst unit rates are still coming out (we’ll update as soon as we can), the planned rise of 80% on the average home has been scrapped and a new price guarantee is set at £2,500 for the next 2 years.
  2. This is a rise from the current price cap of just over £500 a year, however it is over £1,000 lower than what was expected on the 1st October.
  3. The energy price guarantee is based on unit rates and daily standing charge and depends on your usage, so the £2,500 is purely based on an average. You may pay more or less than this dependent on your consumption so it’s important to try and use only what you need.
  4. All domestic energy customers will receive a £400 reduction applied to their energy bills as already planned, taking the annual cost to £2,100.
  5. Around 8 Million households on means tested benefits will continue to receive the additional £650, some of which may have already been paid, further reducing annual bills to £1,450.
  6. More help continues to be available in the form of the winter fuel payment, warm homes discount, cold weather payments and a disability payment. More info here
  7. It’s not yet clear what support will be in place for next winter, but in the immediate term we know the above is available for this 22/23 winter.
  8. For those on LPG / heating oil, a find has been set up to provide additional equivalent support, we’re awaiting more information. We are also being told that this extends to those who are in park homes and for those who pay energy bills directly to landlords.
  9. Great news for those who fixed on higher priced deals to avoid the 80% hikes that has now been scrapped. They can come out of those deals with their energy supplier with no penalty.

 

We’ll add more information around the support for businesses shortly.

 

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