What Does The Energy Price Guarantee Mean For You?

Update: 17/10/2022
Following the new mini-budget, the Energy Price Guarantee is now going to last until April 2023, rather than the initial two years outlined below.  As the cost of living rises it can be alarming that this help has been seemingly cut short. However, in April, the Treasury will review if and how they will help households with energy bills so there may be further support to come, especially for vulnerable households. We will keep our blog updated as soon as we know further.

Following the news that the energy price cap was due to rise by 80% from 1st October the UK government have announced a new energy price guarantee, capping the average UK energy bill at £2,500. But what exactly does this mean for UK households amid the cost-of-living crisis?

What is the new Energy Price Guarantee

To try and combat soaring energy bills the UK Government have announced a new energy price guarantee. This will mean that from the 1st October, a typical UK household will pay up to £2,500 a year on their energy bills for the next two years. It’s important to note that this is not a maximum energy bill therefore if you use more than the average household then your energy bills may well be higher.

How do I get the new Energy Price Guarantee?

For those on the price cap the Energy Price Guarantee is automatic and reduces typical bills from the projected £3,546 that was announced in August.

Questions still remain over how much fixed tariffs will reduce under the price guarantee however energy providers have said that fixes that are higher than the new price guarantee will be lowered. However, energy providers don’t yet know the final, confirmed details for fixed tariffs so phoning them up is likely to be futile. Energy providers will communicate details of fixed rates once they have them.

If your fixed rate ends up being higher than the new price guarantee then large energy firms have said they will allow customers to move from a fixed tariff to their price guarantee tariff without having to pay an exit penalty before 15th November.

Will I still receive the cost of living support set out earlier in the year?

Yes, the government have confirmed that the £400 energy grant for every UK household will still go ahead as planned along with the new Energy Price Guarantee. This is also in addition to the £650 one-off Cost of Living Payment for those on means tested benefits, £300 pensioner cost of living payment and £150 disability cost of living payment.

You can find out more about this cost of living support here.

Is there any further support on UK energy bills?

Despite the Energy Price Guarantee energy bills are still significantly higher than last winter (2021) when an average yearly bill was £1,277. This, coupled with additional rises in the cost of living means that households are still likely to struggle this winter.

So, is there further help for those struggling with the cost of living?

Government support

The UK government is set to do a fiscal statement in the coming weeks where further support could be announced. A cut in energy VAT could be announced here but nothing is confirmed as of yet.

Contact your energy supplier

If you are already struggling to pay your energy bills or are worried about upcoming costs it is worth contacting your energy supplier. Under Ofgem rules they must work with consumers to work out a suitable payment plan that you can afford.

Benefits

If you are struggling with the cost of living it I worth checking whether you are eligible for any benefits. The Turn2Us benefits calculator is a recommended tool to check your eligibility.

Debt advice

Sadly, with already record-high energy bills and rising costs in food and fuel, many are already struggling to keep up with rising costs and are therefore falling into debt.

If you are struggling with problem debt or are struggling to pay your bills, getting debt advice is the first step to getting back on track. Use our online tool to get free online debt advice. Alternatively, you can speak to one of our expert debt advisors via phone or email here.

Don’t have an account with us and are looking for debt advice?

Angel Advance provides online debt advice to get you back on track and make your finances more manageable.

Share this:

Article by:

Related Articles:

Categories: