As we move further into 2023, many households are wondering whether they will continue to receive energy bill support for the rest of the year. In light of the recent energy price increases, the government has implemented an energy price guarantee to protect consumers from excessive energy bills. However, with the ongoing challenges posed by the pandemic and the transition towards renewable energy, it remains uncertain whether this support will be extended beyond the initial period.
In this article, we will explore the current state of energy bill support for households, discuss the implications of the energy price guarantee, and provide insights into what we can expect in the coming months.
What is the Energy Price Guarantee and How Does it Work?
To protect consumers from sharp price increases, the Government introduced the Energy Price Guarantee as a temporary replacement for the energy price cap. This came after Ofgem announced a planned 80% hike to the cap last autumn.
The guarantee further restricts what suppliers can charge households per unit of energy, with the Government covering the difference. The average household will pay around £2,500 per year on their energy bills under the guarantee, although the actual amount will vary depending on usage.
Originally planned to rise to £3,000 in April, the guarantee will now remain at £2,500 until June, after which households and energy firms will revert to the price cap. While many will welcome this news, critics argue that the plan falls short of what is needed to prevent millions of households from slipping into or remaining in fuel poverty.
Since October 2022, every home in the country has received a £400 energy bill rebate, without regard to their ability to pay. Installments of £66 were made in October and November 2022, then from December 2022 through March 2023, payments increased to £67 each month. Most households should have already received their last payment.
What is the latest update?
It was announced last week that the Energy Price Guarantee will be renewed for the next three months, with a typical home getting an additional £160 in savings, limiting annual energy bills to £2,500.
Since October 2022, government assistance has already reduced the typical family’s energy costs by more than £1,300, preventing the average home energy bill from reaching £4,279 per year this winter.
What is happening with the Energy Bills Support Scheme?
Also, the Energy Bill Support Scheme, which is scheduled to expire in March 2023, will no longer be available to households.
This will be replaced with more focused energy cost assistance for specific groups.
It was also announced that nearly 900,000 more households will receive £400 energy bill grants. This will benefit households with no direct links to energy suppliers, such as those living in park homes and care homes.
What if I’m on a prepayment meter?
The EPG discount is automatically subtracted from customers who use traditional prepayment metres by capping the price that they pay for each unit of energy and gas.
The EBSS, in contrast, is distributed to people with prepayment metres through redeemable vouchers worth £66 each month, while it is automatically deposited into the bank accounts of other energy consumers.
According to reports, by February 2023, 24% of these energy vouchers were yet to be used. As a result, a number of charities and consumer advocacy organisations have urged the government and energy companies to promote the programme and encourage consumers to use their coupons.
What if I’m on a fixed rate?
If you use a fixed rate tariff to pay for your energy, the Energy Price Guarantee will only result in savings if your rate is higher than the new cap.
Hence, if you recently fixed your deal at a very high rate, your fix can be decreased to the same level as the price guarantee.
You can terminate your contract without paying an early departure charge if your energy costs were fixed during the previous 14 days. Also, you might be able to swap contracts for free or request that your provider switch to the EPG rate.
With a fixed rate tariff, you won’t see a decrease if your payment is less than the guarantee.
What additional support has been offered to vulnerable households and pensioners?
The UK government has also announced additional support for pensioners and vulnerable households during the winter months. The Winter Fuel Payment provides a tax-free payment to help towards heating costs during the winter months. The payment is made to those who receive the State Pension or certain disability benefits.
The government has acknowledged the risk of fraud and error in the implementation of these support schemes, and measures have been put in place to manage this risk. The Department for Work and Pensions and HM Revenue & Customs are managing the risk of fraud and error, and payments are made directly to energy suppliers or households to minimise the risk of fraud.
What can I do if I’m struggling with my household energy bills?
If you’re struggling to pay your energy bills, there are several steps you can take to ease the financial burden and get the support you need:
- Contact your energy supplier: The first step is to contact your energy supplier and explain your situation. Many suppliers have hardship programs and payment plans in place that can help you manage your bills.
- Check your eligibility for financial assistance: You may be eligible for various financial assistance programs to help with your energy bills. These can include government-funded schemes like the Winter Fuel Payment or the Warm Home Discount.
- Reduce your energy usage: By making small changes to your energy usage, such as turning off appliances when not in use or lowering your thermostat, you can reduce your overall energy bill.
- Switch to a cheaper tariff: Comparing tariffs and switching to a cheaper energy deal can save you money on your bills. Use a price comparison site or speak to an energy broker for advice.
- Seek advice from a professional: There are various organizations and charities that can offer you free advice and support on managing your energy bills, such as Citizens Advice or the National Debtline.
There has also been a new website launched, with the support of energy network operators across Britain, making it easier and faster for energy customers to sign up to the Priority Services Register (PSR).
The PSR offers additional energy assistance to individuals who require it.
Gillian Cooper, Head of Energy Policy for Citizens Advice, said: “Not being on the PSR could mean people in vulnerable circumstances missing out on vital support they’re entitled to.
“We look forward to seeing how this new website can help consumers get the support offered by energy companies. “Even if someone is not eligible, there may be other support available.”
Overall, the UK government’s support for households with energy bills is a step in the right direction towards helping struggling households manage the rising cost of living. However, it is essential to note that the average annual amount of support provided is still relatively low compared to the actual cost of energy bills. Therefore, households are encouraged to take energy-efficient measures and explore alternative energy suppliers to further reduce their energy bills.