How Much Will My Energy Bill Cost This Winter? - A Breakdown Of The Energy Price Guarantee

After months of worrying headlines and predictions around the costs of energy bills from October 2022, an energy price guarantee has been announced freezing annual UK energy prices at £2,500 until 2024 (price based on typical UK usage). The £400 energy grant will bring this typical use total down to £2,100. 

This guarantee will save the average household £1,000 each year in addition to the energy grant. 

A six-month scheme for businesses, the Energy Bill Relief Scheme (EBRS), has been announced providing equivalent support being offered to UK households - a welcome announcement for many business energy customers. 

This news will help millions of UK households avoid a staggering 80% energy price increase that was set to kick in from October and a further 50% in January 2023. This would have taken energy bills on typical usage to £5,400. 

UK households who rely on heating oil will have access to the fund set up by the government that matches the support package offered with the energy price guarantee. 

The energy price guarantee locked at £2,500 for a typical household will last until 2024. 

How Does The Energy Price Guarantee Compare To The Price Cap & Projected Increases 

New Energy Price Guarantee	Current Price Cap	October 2022 Projected Price Cap	January 2023 Projected Price Cap
£2,500	£1,971	£3,549	£5,400

This new energy price guarantee will be welcomed by many households. The guarantee is a cap on standing charges and unit rates. This still means that if you use more, you will pay more. The figures above are based on typical UK household usage. 

UK households will still receive the £400 energy grant paid as £66 per month over the winter. There have been no announcements that this grant will be in place in winter 2023. 

The new energy price guarantee includes getting rid of green levies.

Will Everyone Benefit From The Energy Price Guarantee? 

Yes. Energy prices will be frozen for every household in England, Scotland and Wales for 2 years. This means that everyone in the UK will get help with their energy bills and will go alongside the £400 energy grant. 

Lower-income households receiving tax credits will still receive a further one-off payment of £650, alongside further payments for pensioner households and disabled people. 

Customers will not be expected to repay the help. 

What Happens To Those Who Have A Fixed-Rate Tariff? 

Many UK households have snapped up fixed-rate energy tariffs at higher prices in anticipation of the predictions this winter to protect their bills. 

It is currently expected that the price guarantee discount will also apply to fixed-rate tariffs. This would mean that those on a fixed rate tariff would still benefit from the £2,500 price cap from 1st October.

Any exit fees charged are likely to be at the discretion of your supplier, so it's important to avoid cancelling a tariff before speaking with your energy supplier.