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What the new energy announcement means for you
Last updated:
22 September 2022
Lots of us in the UK are worried about being able to pay the rising cost of our energy bills. However, (then) Prime Minister Liz Truss announced an ‘energy guarantee’ – from 1 October, households on the standard variable rate (SVR) with typical usage will pay no more than £2,500 per year for each of the next two years.
The energy price cap was due to rise to £3,549 from October 1 and then even higher in January 2023.
This doesn’t mean that your bills are not going to increase at all, it's just a cap on what energy companies can charge you. Depending on your usage, your bill could be higher or lower.
Every household will still get the £400 energy bills discount from October which was introduced by the former Chancellor (now Prime Minister) Rishi Sunak. Households will get a monthly discount of £66 or £67 on their domestic electricity bill from October to March 2023. The green levy we all pay has also been temporarily suspended, saving £150 a year. This means the average annual bill is now expected to be around £2,100. However, there has been no commitment at present from the Prime Minister to provide the extra £400 support in 2023.
Don’t forget, there will also be a further £324 payment in the autumn for people getting means-tested benefits, plus a £300 payment paid alongside the annual winter fuel payment in November or December for people over state pension age. There is also a £150 payment available for people with disabilities.
People on means-tested benefits, including Universal Credit, tax credits and Pension Credit should also qualify for the Warm Home Discount of £150. If you’re on a low income and worried about paying your energy bills, it is worth getting a benefits checkOpens in a new window to make sure you’re claiming everything you’re entitled to.
A fund has been set up for people using off-grid fuel, including oil fired heating and liquid petroleum gas (LPG) where prices are not currently capped.
This will help lots of people living in Northern Ireland as well as rural areas of England, Scotland and Wales who have been struggling with very high bills.
The government has also announced support for people who don’t pay domestic energy bills, because they live in park homes, pay their landlord directly or are part of a heat network but there aren’t any details of how you can claim the support available yet.
Join our Facebook communities
Come join us in one (or all!) of our private Facebook group communities. We’re talking about the cost of living now.
These announcements will be welcomed by many, but for others, their bills are already too high to cope with. If you’re struggling to manage your money in these uncertain times, check out our money worries hub which will help you get on top of things.
If you’re someone who has recently fixed their energy bills, you might be worrying that you don’t benefit from this announcement. Martin Lewis has a blog which covers thisOpens in a new window If you’ve fixed your energy bills in the past 14 days you can cancel your contract without charge.
Thinking about cancelling your energy bill Direct Debit?
Are you thinking about cancelling your energy bill Direct Debit to only pay what you owe?
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What help is available if you run a business?
Whereas households have been shielded from rising energy prices for two years, businesses currently will have their energy costs capped for six months.
This will be reviewed in three months to see if the help should be targeted towards more vulnerable industries, such as hospitality.
Beware of Fraudsters
Fraudsters are pretending to be Ofgem. If you receive a call or email telling you to apply for your energy bill rebate, ignore it. Your energy provider will apply your rebate automatically as soon as you're entitled to it.
