May 2024 update
It's worth noting that, even though prices have dropped, energy bills are still higher than they were this time last year, and the £66/67 per month energy support customers have received since October has ended.
But can you switch?
There are fixed deals currently available. Compare energy prices by entering your postcode below.
What had happened?
2022
In August 2022, Ofgem announced that the price cap level would increase to £3,549 from October, which would have meant an 80% increase in bills for average households from the previous cap level of £1,971.
Recognising the financial pressure that this would put UK households under, the government announced an Energy Price Guarantee that would see the price cap level effectively frozen at £2,500 until April 2023, subsidised by the government. This was still significantly higher than the prices customers had been paying, but not as high as the wholesale energy market was dictating.
2023
In February 2023, Ofgem announced that the level of price cap (if it were valid) would decrease to £3,280 from April. Simultaneously, the EPG level was due to rise to £3,000, meaning bills would increase for customers at a time when financial support was ending and wholesale prices were dropping. As a result, the government decided to extend the EPG at the £2,500 level for three more months with the possibility that wholesale prices would drop further by the summer, allowing Ofgem's price cap to take over.
What does this mean for customers on standard variable tariffs?
As far as standard variable tariffs are concerned, the Energy Price Guarantee is now obsolete - the price cap is being used to calculate capped unit rates again, so for average use customers paying by Direct Debit, the price cap level is £1,690 per year.
It’s important to remember that this is a cap on the unit rate of the energy you use - it is not a cap on your final bill. The less energy you use, the less you will pay - so you can still save money on your energy. If you use more than £1,690 worth of energy, you'll pay more than £1,690.
In the table below, you can see the energy price cap's average unit rates with standing charges for those on standard credit meters until July 2024.
| Electricity | Gas | |
|---|---|---|
| Unit rates | 24.50p per kWh | 6.04p per kWh |
| Standing charge | 60.10p per day | 31.43p per day |
And in the second table here, you can see the region-specific rates and standing charges for those on standard credit meters.
| Region | Gas unit rate per kWh (April to July 2024) | Gas daily standing charge (April to July 2024) | Electricity unit rate per kWh (April to July 2024) | Electricity daily standing charge (April to July 2024) |
|---|---|---|---|---|
| Eastern | 5.96p | 31.01p | 25.26p | 44.00p |
| East Midlands | 5.90p | 31.11p | 23.77p | 56.00p |
| London | 6.11p | 32.04p | 25.72p | 40.79p |
| Midlands | 6.00p | 31.45p | 23.84p | 62.73p |
| Northern | 6.03p | 31.58p | 23.36p | 71.20p |
| Northern Scotland | 5.96p | 31.58p | 24.96p | 61.10p |
| North West | 5.96p | 31.62p | 24.67p | 51.19p |
| North Wales & Mersey | 6.01p | 31.89p | 25.42p | 67.04p |
| Southern | 6.12p | 30.78p | 24.66p | 63.33p |
| South East | 5.97p | 30.94p | 25.29p | 56.90p |
| Southern Scotland | 5.96p | 31.67p | 23.97p | 63.31p |
| South Wales | 6.25p | 31.75p | 24.51p | 63.26p |
| Southern Western | 6.33p | 30.97p | 24.21p | 67.19p |
| Yorkshire | 6.01p | 31.56p | 23.36p | 67.44p |
What does this mean for customers on fixed tariffs?
The Energy Price Guarantee means different things for fixed tariff customers depending on the unit rates they fixed at.
What about other customers?
Customers on prepayment meters
The prepayment price cap is set at £1,463 from 1 April 2024 and is applied in the same way as the standard variable price cap.
Customers who aren't connected to the grid
Under the EPG:
If you're not connected to the grid (for instance, if you live in a park home or on a heat network), support via the Energy Bill Relief Scheme (introduced for businesses and non-domestic customers) will be provided to the business which has the relationship with the energy supplier. This benefit will then be passed on to customers and enforced via legislation.
You don't need to do anything to receive this support.
Customers who use electricity but not gas
Under the EPG:
Households which are connected to the electricity network but use fuels other than gas for heating will still receive Energy Price Guarantee support for electricity costs.
Some households may not be eligible for heating costs support through the Energy Price Guarantee - for example, if they're located in an area that isn't served by the gas grid. In these cases, an additional payment of £100 will be provided to compensate for the rising costs of other fuels, such as heating oil.
You don't need to do anything to receive this support.
Under the price cap:
The support will end and electricity unit rates will be capped under the price cap system.
Customers who rent
Under the EPG:
Renters who are responsible for their own energy consumption and payments will benefit automatically from the Energy Price Guarantee.
If landlords are responsible for energy contracts, they should pass on the discount regardless of how tenants pay for their energy usage - this will be enforced via legislation.
Under the price cap:
The support will end and energy unit rates will be capped under the price cap system.
What can you do now?
Reduce your energy usage
To keep bills at a manageable level, it’s good practice to get into the habit of saving energy wherever possible. A few simple changes to the way you use energy could positively impact your bills. You can find our energy-saving tips here.
Keep an eye on the energy market
Enter your postcode to get personalised energy insights, keep up to date with energy market news and to sign up for deal alerts when they become available.
FAQs
How will the energy price freeze be implemented?
The energy price freeze will be implemented automatically by suppliers when they calculate your bill - there's no need for customers to do anything or speak to anyone to ensure they benefit from the price freeze.
What are the benefits of the energy price freeze?
The obvious benefit of the energy price freeze is that energy prices won't increase to £3,000, which will ensure that millions of households are put under less financial pressure than they would have otherwise been.
Additionally, from a regulatory point of view, the Energy Price Guarantee should provide time to fix the longer-standing energy industry issues that have led to this point.
Will energy prices come down?
Wholesale energy prices have fallen throughout the winter, meaning suppliers may begin offering fixed deals at a reasonable price in the next few months.
Do businesses get an energy price freeze?
Business energy is not capped, so there was a danger that many smaller companies would bust if their energy issues were not addressed. However, an equivalent scheme will be put in place (details to be announced) for six months to help them through the winter, after which the long-term situation will be addressed.
