How does the Energy Price Guarantee affect the energy price cap?
Supply and demand issues in the global wholesale market have increased our energy bills. Because of this the UK government has introduced an energy plan called the Energy Price Guarantee (EPG) which replaces the energy price cap. But what does this mean for you? Read on to find out what the EPG is and what you can do if you’re worried about how it could affect your bills.
Don't have a smart meter yet? Join millions of Brits who are using their smart meters to help manage their household budgets.
What is the Energy Price Guarantee (EPG)?
The Energy Price Guarantee, or EPG, was introduced on September 8th, 2022 by the UK government. It will discount the cost of gas and electricity for energy consumers and will apply to all households in Great Britain. Under the EPG, a typical household will pay no more than £2500 per year for their energy. The government has announced that the EPG will run in its present form until April 2023.
In his autumn statement on 17th November 2022, the chancellor announced that the EPG will be extended from April 2023 to end of March 2024, but at a revised rate meaning a typical household will pay no more than £3000 per year.
It’s important to note that the Energy Price Guarantee doesn’t limit the total amount you’ll spend on energy.
This means that you will still pay for the gas and electricity that you use but the government’s Energy Price Guarantee will limit the price that suppliers can charge for each unit of energy. The more energy you use the more you’ll spend.
How does it affect the price cap?
From the 1st of October, the Energy Price Guarantee will replace the energy price cap.
What does the Energy Price Guarantee mean for you?
As of October 1st, 2022, the Energy Price Guarantee will come into effect ensuring the typical household pays no more than £2500 per year for their energy.
Whilst £2500 per year is still a big increase in energy bills compared to last year, this Energy Price Guarantee, in combination with the Energy Bills Support Scheme ,is designed to replace the energy price cap and protect consumers from rising energy costs.
If you are worried about your energy bills you can find more help here.
For those who use heating oil, live in park homes or are on heat networks, a new fund will be set up to ensure that they are able to benefit from the support.
For businesses, charities and public organisations, an equivalent guarantee will be introduced for 6 months. After the 6 months, support will be provided to specific businesses who need it most.
The Energy Price Guarantee (EPG) will be in addition to the £400 Energy Bill Support Scheme that was previously announced.
What can you do to manage rising energy bills?
1. Be more energy efficient in your home (but only if you can!)
It’s important that you use the energy you need to keep warm, safe and healthy at home. And making small changes in how you do this can often have a big impact on bills. Simple Energy Advice can provide help in managing this. This site includes energy efficiency advice as well as tips on how to reduce your energy usage.
Smart meters could also help you to find ways to reduce energy waste around the home and bring costs down. The in-home display shows you in near-real time the amount of energy being used in pounds and pence, allowing you to keep a closer eye on your energy spending habits. But make sure you’re still using the electricity and gas you need in your home.
Watch the video below to find out how to get the most out of your smart meter:
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Smart meters are here, and they come with a handy in-home display, which shows you how much energy you're using. So you can see when you're using a lot, and work out where small changes could help you to use less.
They could also help with household budgeting because you'll be able to see in near-real time just how much you're spending on your energy in pounds and pence. That'll help you choose the right supplier and the tariff that works for you.
With a smart meter, you'll receive accurate bills, so you'll only pay for what you've actually used, which means estimated bills will be a thing of the past.
There are also certain tariffs out there. to help you save money, based on when you use your energy. These time-of-use tariffs could mean that energy is offered at a reduced price, or even for free, during times when demand is low or excess energy is available. So you could end up paying less to mow the lawn, charge your devices, or use the washing machine.
It's all about paving the way to a more energy efficient future.
2. If you are unable to pay your energy bills, talk to your supplier
If you are unable to pay your energy bills, or you are in debt to your energy supplier, then speak to your supplier as soon as possible. If they know there is a problem, they can work with you to find a solution.
There are different options available, one is to ask to set up a payment plan. Just make sure you’re realistic about what you can afford to repay. You don’t want to leave yourself short for other essential bills.
3. See if you’re eligible to be added to the priority services register
If you’re of pensionable age, have children under 5, have a disability or long-term medical condition, you could be added to the priority services register. Being on the register means that you will be prioritised in the event of a power cut. You will also receive additional non-financial services such as password security or information in different formats.
You’ll need to tell your energy supplier about your situation to be added to their list, and they’ll pass your details onto your Distribution Network Operator (DNO) too.
4. Check that you’re getting all of the support you’re entitled to
In response to rising energy bills, the government has announced the Energy Bills Support Scheme. Through this scheme, the government will give every household in Great Britain £400 off their electricity bill. It will be paid in instalments between October 2022-March 2023. You won’t have to do anything to get your discount, and you won’t have to pay it back. Find out how you’ll receive yours below:
- If you pay for your electricity by direct debit, you will see an automatic deduction off your bills between October 2022-March 2023
- If you have a prepay smart meter, your meter will automatically be topped up on a monthly basis
- If you have a traditional prepay meter, you’ll receive an energy bill discount voucher in the first week of each month, via text, email or in the post
You can find out more about the scheme and other help you might be eligible for here.
Alongside this, the organisations below can help you if you’re struggling with debt or need benefits advice. You can contact them using the details below:
| Programme | How can they help? | Contact details |
|
NEA’s Warm and Safe at Home service |
The NEA’s Warm and Safe at Home service offers a free support service providing advice on energy bills and keeping warm in your home. They can also help with benefits advice. |
You can visit NEA’s Advice pages. |
|
Home Energy Scotland |
Home Energy Scotland offers free support service providing advice on energy bills and keeping warm in your home. They can also help with benefits advice. |
You can visit the Home Energy Scotland website. |
|
StepChange Debt Charity |
The StepChange Debt Charity provides free independent debt advice. |
Please call 0800 138 1111 for advice. |
|
National Debtline |
The National Debtline can offer free independent debt advice. |
You can call 0808 808 4000 |
|
The Money Advice Service |
The Money Advice Service provides free impartial money advice to help improve your finances. |
Please call 0800 138 7777 for more information. |
|
Citizens Advice Debt Helpline |
The Citizens Advice Debt Helpline offers free advice for all types of debt and money guidance. |
Call 0800 240 4420 for more information. |
|
Turn2Us |
Turn2Us help people in financial need to identify local benefit advisors and grant support. |
You can call 0808 802 2000 to identify support in your area. |
You may also be interested in...
- How to use a smart meter to save money - with a smart meter and accompanying in-home display, you can be more aware of your energy usage.
- How smart meters can help reduce your carbon footprint - find out how smart meters will help us transition to a lower carbon future.
- How to get a smart meter – three steps to help support Britain’s energy upgrade.