Millions of households will get more support with high energy bills to help ease the cost of living, Jeremy Hunt has announced today ahead of the Spring Budget.
The Energy Price Guarantee, which is protecting households by capping typical energy bills at £2,500, will be maintained at the same level for a further three months over April, May, and June, worth £160 in total for a typical household.
The Chancellor is announcing the extension today (March 15) as part of his Spring Budget, which focuses on easing the impact of rising prices, delivering on our promise to halve inflation, and growing the economy by supporting more people into work.
Read more: Energy firm Shell makes extra £150 payment to thousands of customers
Government support has already cut the typical family energy bill by over £1,300 since October, stopping the average household energy bill hitting £4,279 a year this winter.
The Chancellor's three-month extension of the Energy Price Guarantee at £2,500 means households won't feel the full force of Ofgem's Price Cap between April and June – which stands at £3,280 – helping to bridge consumers into the summer.
Lower wholesale gas prices are expected to feed through to lower household energy bills from July, where Cornwall Insight data suggests the Ofgem Price Cap will reach an estimated £2,100 a year for a typical household.
From April, more support is coming online with eight million low income and vulnerable households set to receive at least £900 in cash payments over the next year, benefits and pensions set to rise by over 10%, and the National Living Wage increasing to a record £10.42 an hour, so that it always pays to work.
The Spring Budget will go even further, providing hundreds of pounds more in help with childcare costs for parents on Universal Credit and ending the energy premium paid by households who use pre-payment meters, which will save 4 million families £45 a year from July.
Prime Minister, Rishi Sunak said: “We know people are worried about their bills rising in April, so to give people some peace of mind, we’re keeping the Energy Price Guarantee at its current level until the summer when gas prices are expected to fall.
“Continuing to hold down energy bills is part of our plan to help hardworking families with the cost of living and halve inflation this year.”
Chancellor, Jeremy Hunt added: “High energy bills are one of the biggest worries for families, which is why we’re maintaining the Energy Price Guarantee at its current level. With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too."
Energy Secretary, Grant Shapps continued: "Putin's illegal war has cost British families, which is why we've stepped in to pay around half of the typical household energy bill. With wholesale prices falling families will start to benefit, but in the meantime we're stepping back in with the Energy Price Guarantee to prevent the typical electricity and gas bill exceeding £2,500.
"It's just part of our plan to help families this winter.”
At Autumn Statement the Chancellor announced that the EPG was due to rise to £3,000 on April 1, with the government then expecting to borrow £12 billion to fund this support. Since then, energy prices have fallen by 50 per cent, cutting the borrowing needed to fund energy support by two- thirds to £4 billion.
The change announced today also follows the latest Ofgem Price cap of £3,280 from April to June which, in large part, sets the cost for this three-month extension. Households would pay the full Ofgem price cap rate if there was no Energy Price Guarantee.
Holding down energy bills is also part of the government’s plan to halve inflation this year, and in November the Office for Budget Responsibility said that the EPG would lower the peak rate of inflation.
Read next:
- Full list of winter energy payments that you could still get
- Your rights if you have had a prepay meter fitted against your will
- Universal Credit claimants could lose £1,000 under DWP trial
- Cost of living: A five-step plan to get debt free in 2023
- How to work out how much your heating costs per hour
