The Energy Price Guarantee, which is capping typical energy bills at £2,500, will be maintained at the same level for a further three months over April, May, and June, it has been revealed.
The Chancellor is announcing the extension today (15 March) as part of his Spring Budget.
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.
The Spring Budget will also include measures to end the energy premium paid by households who use prepayment meters, predicted to save 4 million families £45 a year from July.
Chancellor Jeremy Hunt said: “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.”
While the cap will remain at £2500 on 1 April, there may be tariff changes as suppliers re-balance between standing charges and unit rates.
From July, households will pay the lower of the Ofgem Price Cap or the Energy Price Guarantee, which will revert to £3,000 from July 2023 until the end of March 2024.