The Government has released a new chart showing how much the Energy Price Guarantee will cut your gas and electricity bills from October 1. Bills had been set to soar at the start of next month - going up by around 80% - but Prime Minister Liz Truss has announced a scheme to prevent that.
Bills will stilll go up, especially as we head into winter and people begin using heating, but will not go up by as much as had been feared. And future increases planned for January and April are also on hold.
Households could save up to £1,400, under Liz Truss's new plan. The chart shows that a family living in a detached property on typical use would have spent £4,700 a year on energy bills under the October price cap. However, this will be frozen at £3,300 - a saving of £1,400, reports The Express.
A family who lives in a mid-terrace property will save £950 a year under the new plans because the cap will be frozen at £2,350 instead of the £3,300 which it would have risen to on October 1.
Gareth Kloet, energy spokesperson for Go.Compare Energy, said : "We have to remember that millions of families are still facing energy bills of £2,500 which is an extortionate amount to pay for energy.
“We believe that more can still be done and the Government has a duty of care to help relieve the pressure that homeowners and businesses are facing, and in particular those most vulnerable to the cost-of-living crisis."
The Energy Price Guarantee will ensure that a typical household in Great Britain pays an average £2,500 a year on their energy bill, for the next two years, from 1 October 2022.
The consumer saving will be based on usage, but a typical household will save at least £1,000 a year (based on current prices from October). Energy suppliers will be fully compensated for the cost of the Energy Price Guarantee.
This is in addition to the £400 Energy Bills Support Scheme. This will be paid in six instalments from October.
The most vulnerable UK households will also continue to receive £1,200 of support provided in instalments over the year.
An additional discretionary fund will be available for those households who are outside of the schemes. For example, households not on standard gas / electricity contracts.
How the Energy Price Guarantee will be applied to energy bills
You do not need to apply, and there’s no need to contact your energy supplier.
For consumers in England, Scotland and Wales who pay for their energy through a monthly, quarterly or other regular bill, the Energy Price Guarantee will be applied when your bill is calculated.
Because of the different energy system in Northern Ireland, and the different ways the global energy market impacts different fuel types, the Energy Price Guarantee will have to work a bit differently for some consumers. The government is working with Northern Ireland partners including the NI Utility Regulator and NI energy suppliers to ensure that equitable level of support can be delivered to consumers and businesses in Northern Ireland.
If you’re on a pre-payment meter
For GB pre-payment meter customers, the Energy Price Guarantee will be applied to the rate you pay for each unit of energy, so the money you put on the meter will last longer than would otherwise have been the case this winter.
As is the case with the ‘price cap’ under the Energy Price Guarantee there will continue to be a small difference between the unit cost for a pre-payment meter customer and other bill payers.
If you’re on a standard variable tariff
The average unit price for dual fuel customers paying by direct debit will be limited to 34.0p/kWh for electricity and 10.3p/kWh for gas, inclusive of VAT, from 1 October.
These unit prices have been passed to suppliers to ensure that they are used to calculate bills on time for 1 October.
Energy suppliers will adjust standard variable tariffs automatically. Customers on standard variable tariffs do not need to take any action to get the benefits of this scheme.
If you’re on a fixed tariff
If you’re on a fixed tariff at a higher rate caused by recent energy price rises, your unit prices will be reduced by 17p/kWh for electricity and 4.2p/kWh for gas.
These unit prices have been passed to suppliers to ensure that they are used to calculate bills on time for 1 October.
Energy suppliers will adjust fixed tariffs automatically. Customers on fixed tariffs do not need to take any action to get the benefits of this scheme.
Standing charges
Average standing charges will remain in line with the levels set by Ofgem for the default tariff cap from 1 October, at 46p per day for electricity and 28p per day for gas, for a typical dual fuel customer paying by direct debit.
If you’re not connected to the grid
Those households not on standard gas or electricity contracts, such as those living in park homes or on heat networks – and so outside the scheme – will be no worse off and will receive comparable support through a discretionary fund.
If you pay for electricity as part of your rent
The Energy Price Guarantee is applied per unit of gas or electricity used for households with a domestic electricity connection, so will be applied if your landlord has a domestic electricity contract with a licensed electricity supplier.
Your landlord may be reselling the electricity to you based on your usage, in which case:
- they must comply with the maximum resale price rules which say they must not make a profit
- the maximum resale price for electricity is currently set at the same price as that paid by the person reselling it (see Ofgem’s guidance on ensuring customers are being charged no more than they should)
Your landlord may charge an ‘all inclusive’ rent, where a fixed cost for energy usage is included in your rental charges, in which case:
they are encouraged to come to an agreement with you on the Energy Price Guarantee in line with the arrangement in your tenancy agreement, and we are exploring a full range of options to ensure this happens, including using the planned emergency legislation.
the landlord’s fixed charge may already provide you with similar protection from the impact of energy price increases
