Energy bill payer support

Energy bill payer support is on it’s way! This follows the announcement that energy bills are poised to rise significantly after regulators raised the price cap which sets the maximum suppliers can charge. 

How will this affect the average household?

This means that from April 1 the energy price cap will increase by 54 per cent for approximately 22 million customers. Furthermore, according to Ofgem, the average household will pay £1,971 for their gas and electricity for the year – a leap of £693. An average pre-payment customer will see an increase of £708 from £1,309 to £2,017 a year.

Thankfully, if you are on a fixed term energy tariff, your existing rate will continue to apply until the deal ends.

The price cap sets the top rate suppliers can charge per unit of gas and electricity. It is not a cap on overall energy bills, which will still rise or fall depending on how much you consume.

From April 1, electricity costs are capped at 28p per kWh for electricity and 7p per kWh for gas. Businesses on commercial contracts are not protected by a cap. Unless wholesale energy prices fall, the cap will increase again in October, with experts predicting it will hit £2,300.

What are the governments energy bill payer support measures?

The government has announced the following support measures:

  • Upfront £200 discount – Available to all domestic energy customers from October, it will be automatically taken off people’s bills, with the government loaning the money to suppliers to cover the costs. Pre-payment customers will receive £200 credit. The money will then be repaid in annual instalments of £40 added to bills over five years from 2023.
  • Council tax rebates. Around 80 per cent of households will also get £150 off their council tax bill. A rebate will be applied to all residential properties in England rated A to D for council tax in April. You do not have to apply for the rebate, which will be applied automatically.
  • Warm homes discount. The government will proceed with planned expansion of the warm homes discount which it says will increase the number of people eligible by one third – around 780,000 families. The £140 per year payment for low-income families in England and Wales will increase to £150 next winter. If you are eligible you can apply for the discount through your energy supplier.
  • Discretionary fund. There is also a £144m discretionary fund which councils in England can allocate to people who are on low incomes but who do not automatically qualify for a rebate because they are not in a band A to D property, or because they don’t pay council tax. To find out if you are eligible, speak to your local authority.

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