Chancellor Jeremy Hunt has confirmed how the Energy Price Guarantee will be changing from April 2023. In his Autumn Statement, Hunt revealed that the scheme would be extended for another 12 months, but that the cap on bills would be raised. After April, the average UK household will expect to pay £3000 a year for gas and electricity.
What is the Energy Price Guarantee?
While most people refer to it as an annual price cap, the Energy Price Cap is a cap on energy unit prices. That’s the amount your supplier charges you for each unit of gas and electricity you use, measured in kWh, as well as a daily standing charge.
As of November 2022, the Energy Price Guarantee is set at £2,500 for the average UK household. This is based on that households use 12,000 kWh of gas and 2,900 kWh of electricity each year. From April, the same usage will cost £3000 over the year, or £250 a month.
How is my energy bill calculated?
Your bill is calculated based on your tariff and how much energy you use. Electricity and gas use is recorded by the meters in your home, and for each kWh used you will be charged your unit cost. The standing charge is a fixed daily charge that you pay regardless of whether you use any energy that day.
All standard variable tariffs in the UK are currently set at the price cap, but the unit rates will vary slightly between suppliers and areas. The average total should be the same across tariffs. You can check the specific rates of your tariff through your account with your energy supplier, either online or over the phone.
You can make sure your energy bills are as accurate as possible by regularly submitting meter readings to your supplier, or by fitting a smart meter. These devices submit meter readings to your supplier automatically, meaning they will never estimate your usage. They also show how much energy you are using in real-time allowing you to spot idle devices that are still costing you money.
How much will I pay for energy?
Your own energy bill will be based on how much energy you use at home. If you’d like to get an estimate on your monthly energy bill – as well as your other essential services – visit our Utility Bills calculator. Right now, the calculator uses the current Energy Price Guarantee unit costs to estimate your bills.
Closer to April, once more suppliers have confirmed their average unit costs, we’ll update our calculator with the new unit rates.
How can I save on my energy bills?
Right now, tariffs under the Price Guarantee are the cheapest available. As your bills will be based on consumption, the only way to reduce your bills is to use less energy at home. We’ve compiled our best energy-saving tips – ones that won’t cost a fortune up front and will actually help you save – here.
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