The Energy Price Guarantee (EPG) caps the unit prices that domestic customers pay for their energy at rates lower than the energy regulator Ofgem's price cap. The government makes up the difference with your energy provider. The EPG does not affect standing charges, which are determined by Ofgem.
The government had been planning to increase the amount households had to pay by around 20% from 1 April, but the Chancellor, Jeremy Hunt, has today confirmed that prices will remain as they are until July. It's likely that the next time Ofgem changes its prices – from the 1 July – they will drop lower than the current EPG rates, so households will see a small energy price drop.
Today's U-turn comes after weeks of mounting pressure from consumer groups and charities concerned that the additional costs would push many households already in financial distress over the edge.
However, it's worth noting that the government's Energy Bill Support Scheme, or EBSS, which sees most households receive an additional £67 a month towards their energy bills, will still finish at the end of March.
That means that, in real terms, households will still find April's monthly bill more expensive than they have been recently.
Listen: energy experts discussA 'typical' household using an average amount of energy and paying by direct debit could continue to expect to pay around £2,500 a year, or £208 a month, under the EPG.
Each unit of electricity currently costs 34p on average, while each unit of gas costs an average of 10.3p. The more you use, the more you'll pay. Because standing charges are slightly increasing from 1 April, the electricity unit rates will slightly decrease to an average 33.2p to balance out the total bill.
During his Budget statement, the Chancellor said: 'There is still enormous pressure on family finances. Some people remain in real distress and we should always stand ready to help when we can.
'I today confirm that the Energy Price Guarantee will remain at £2,500 for the next three months. This means the £2,500 cap for the typical household will remain in place when energy prices remain high, ahead of an expected fall in prices from July. This measure will save the average family a further £160 [in total over that period].'
Although the total Energy Price Guarantee isn't changing, the daily standing charges you pay for an electricity and/or gas connection are going up slightly. These are based on the price cap set by energy regulator Ofgem.
From 1 April, the average standing charges will be:
These are averages across Great Britain and based on paying by direct debit. Daily rates vary by as much as 24p depending on where you live. Areas with higher standing charges usually have lower unit rates, and vice versa.
Your standing charge will also be higher if you pay when you receive your bill or have a prepayment meter.
Energy unit rates from 1 April
To account for the small increase in standing charges, the average unit rates will ever so slightly decrease.
If you pay by direct debit and live in England, Scotland or Wales, the average rates from 1 April - 1 July will be:
These are the average amounts that you can be charged for a unit (or kilowatt hour). How you pay and where you live affect exactly what you pay. Your energy supplier should tell you exactly what you’re paying, if it's changing, in due course.
If you're one of the estimated four million households still on a fixed tariff, your prices will stay at the rates you fixed unless they're higher than the EPG. In which case, your prices will be capped at EPG rates.
Postponing the price rise is a welcome relief
Rocio Concha, Which? Director of Policy and Advocacy, said: 'The Chancellor’s decision to postpone increasing the energy price guarantee to £3,000 will be a welcome relief for households across the country.
'People will still face an increase in energy bills when the energy bill support scheme comes to an end in April. However, keeping the energy price guarantee at £2,500 is an important step in the right direction which will offer a much-needed lifeline to families who continue to be battered by high inflation.'
Prepayment meter customers will pay less
If you pay as you go for your gas and electricity, it's currently pricier than paying by direct debit. That's because it costs energy firms more to serve these homes, according to energy regulator Ofgem.
This is set to change from 1 July 2023, the Chancellor announced today. The energy premium will be scrapped until 31 March 2024 , saving households that use prepayment meters £45 a year.
Announcing the change in the House of Commons today, Jeremy Hunt said: 'On top of the energy support measures already announced, the second measure concerns over 4 million households on prepayment meters. They're often the poorest households. They currently pay more than comparable customers on direct debit.
‘Ofgem has already agreed with suppliers a temporary suspension to forced installations of prepayment meters. But today I go further and confirm we will bring their charges in line with comparable direct debit charges. Under a Conservative government, the energy premium paid by our poorest customers, our poorest households, is coming to an end.’
source https://www.which.co.uk/news/article/government-u-turns-on-april-energy-price-increase-awqB90A7VRF8