What is the energy bill support scheme?

The energy bill support scheme in the UK is a government program that provides financial assistance to low-income households who struggle to pay their energy bills. The scheme, which was introduced in 2018, first provided a one-off payment of up to £140 to eligible households to help pay their energy bills. The program is aimed at households that are most in need of assistance, such as those on certain benefits or those with disabilities. Alongside this, the scheme also provides advice on how to reduce energy bills and make homes more energy-efficient.

But the scheme has gone through many changes since 2018, and in between the winter of 2022 and 2023, you can now expect a discount of £400 on your typical household energy bill. The government has said that the extension will help approximately 2.2 million people who are eligible for the support.

Government subsidies were slated to be reduced beginning in March under earlier plans, which were revealed late last year. As a result, average bills would have increased to 3,000 pounds.

Since its last budget announcement in November, the government claimed that wholesale energy prices have dropped by 50%, which has resulted in a reduction of the cost of funding the support program from April to June of 2/3, or 4 billion pounds.

With this announcement, it was also found that The Energy Price Guarantee will remain at £2,500 a year for a typical household until the end of June.

What is the Energy Price Guarantee?

The Energy Price Guarantee, also known as the EPG, aims to keep the annual electricity and gas costs for the typical British household to a minimum. The EPG was first announced in October 2022, and seeks to lower energy costs following skyrocketing prices under the price cap, and is now in the way of preventing an 80% price increase.

Journalist and MoneySavingsExpert Martin Lewis has now urged the Chancellor to maintain the energy price guarantee at £2,500 annually rather than raising it to £3,000 annually as planned starting on April 1, 2023. He believes that by doing so, prices will drop when they are revised in the summer.

According to Lewis, based on current projections, the EPG subsidy may only be required from April to July, and the underlying ofgem price cap appears to be less expensive than the typical household’s current EPG rate of £2,500 per year.

The price cap prediction states that from 1 July 2023 to 30 September 2023, the bill will decrease by 31%, or £2,201/year, for typical use. The annual guarantee for energy prices will be £3,000.

Though, further energy support for households has been ruled out by chancellor of the excheque Jeremy Hunt.

Chancellor Jeremy Hunt said that support for families is always under review;

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.

More assistance will be made available starting in April, when 8 million low-income and vulnerable households will start receiving at least £900 in cash payments over the following year, benefits and pensions will increase by more than 10%, and the National Living Wage will reach a record of £10.42 an hour, ensuring that working is always financially advantageous.

The Spring Budget will go even further, offering parents receiving Universal Credit hundreds of dollars more in assistance with childcare costs, and ending the energy premium paid by homes using prepayment meters, which will save 4 million families struggling with the cost of living around £45 annually starting in July.

Prime Minister Rishi Sunak said:

We know people are worried about their bills rising in April, so to give people some peace of mind, we’re keeping the Energy Price Guarantee at its current level until the summer when gas prices are expected to fall.

Continuing to hold down energy bills is part of our plan to help hardworking families with the cost of living and halve inflation this year.

Extra support for households

Millions of households are still struggling with the wholesale price of gas and power. Contact your energy supplier if you are concerned about rising prices.

Millions of low income and vulnerable households will be paid £900 in three instalments as the government’s support for the cost of living. You will know if you are eligible for this if you get certain benefits, like Universal Credit. You can expect to receive your installments over the course of the year, with the DWP releasing more information closer to the time.

First instalment of £301 will be paid during Spring 2023.
Second instalment of £300 will be paid during Autumn 2023.
Third instalment of £299 will be paid during Spring 2024.

For those in Northern Ireland

The average household in Northern Ireland will receive a lump sum of £600 to go towards the government’s gas and electricity. Payments will be made directly through your energy supplier, with the option to get vouchers for government support if you do not pay by direct debit.

Applications are open for park home residents and tenants whose landlord pay their energy bills. You can apply online for energy bill support.

With rising prices, millions of households can also consider…

Winter Fuel Payment: This is an annual tax-free payment made to eligible households to help with the cost of heating their homes during winter. It is available to those born on or before 5 October 1954.
Cold Weather Payment: This is a payment made to eligible households when the temperature in their area is recorded as, or forecast to be, below zero degrees Celsius for seven consecutive days.
Warm Home Discount: This is a one-off discount of £140 off electricity bills for eligible households. The discount is usually applied between September and March.
Energy Company Obligation: This is a scheme that requires larger energy suppliers to provide assistance to households that are struggling to pay their energy bills or that live in homes that are energy inefficient. This assistance can take the form of free insulation or boiler replacements.
Payment Plans: Energy suppliers are required to offer payment plans to customers who are struggling to pay their bills. These plans allow customers to spread the cost of their bills over a longer period of time.
Fuel Direct: This is a scheme that allows customers on certain benefits to have their energy bills deducted directly from their benefits payments.
Citizen’s Advice: Citizens Advice can provide information and advice on how to reduce energy bills and how to access support if struggling with bills.