What does the new energy price guarantee mean for me?

There’s been a lot of information recently about the rising cost of energy and you might be left wondering what does all this mean? Don’t worry we’ve read through all the information, so you don’t have to. Here’s a breakdown.

This month the new government announced they would tackle the rising cost of living with an energy price guarantee. For those worried about the possibility of having to choose between heating and eating this winter, it was a welcomed announcement.

What is the energy price guarantee?

The energy price guarantee will cap how much you pay for each unit of energy you use and could mean the average household will pay £2,500 a year or on average £208 a month. The current price cap is £1,971 a year but that was due to increase to £3,549 a year in October and £5,400 a year in January.

The guarantee won’t cap your total overall bill and will instead limit the amount you will be charged for each unit of energy. So, if you use less you pay less and if you use more you pay more.

When will it start?

The new price guarantee will start from 1 October and will last for two years.

Who will it help?

The new price cap affects customers on both fixed and variable energy tariffs. All standing charges and unit rates will be capped per unit whether you pay by direct debit or by pre-payment meter.

Is there extra support to help anyone struggling?

£400 energy bill discount
All UK households will receive £400 off their energy bills from October. The discount will be applied in six installments of £66 through the winter. People with a meter paying by credit, payment card or direct debit will receive an automatic deduction from their bills. People who pay by a prepayment meter will be provided with discount vouchers to use from the first week of every month sent by text, email or post. 

£650 benefits and tax credits cost of living payment
For some people on universal credit, income based JSA, income related ESA, income support, pension credit and tax credit you will be entitled to £650 cost of living support. The first half of this payment has been paid automatically for most people and the second payment will be paid later this year. For more information go here

£150 disability payment
People who receive certain disability benefits will automatically receive a £150 one-off cost of living payment and will be paid to anyone eligible this month. Find out if you’re eligible here 

£300 pension payment
If you’re entitled to a Winter Fuel Payment for 2022-23 you will get an additional £300 paid with your normal payment in November. The full amount you will get will depend on your circumstances. You can find more information here

I’m struggling to pay my energy bill. What do I do?

If you’re struggling with rising costs, please know you’re not alone. If you can’t afford to pay your utility bill, the worst thing you can do is ignore it. Instead get in touch with our Money Advice Team. They are a dedicated team who can help you apply for additional income, reduce your outgoings or help you manage your money.

*Information is taken from online money advice experts and correct at the time of publishing