Government support schemes spared households from the worst of the energy crisis this winter. But despite wholesale prices and the Ofgem cap coming down, people will soon be paying more when the Energy Price Guarantee (EPG) goes up at the end of March. Public sector borrowing is also falling, but the government is unlikely to budge in the Spring Budget.
In November, Chancellor Jeremy Hunt established the EPG, a scheme designed to save people money by capping costs even lower, with the government fronting the difference to suppliers.
Set at £2,500, the Department for Business, Energy and Industrial Strategy (BEIS) claimed the initiative would save the typical household in Great Britain around £900 compared to undiscounted prices over the winter.
However, the EPG will be bumped up to £3,000 in April – at the same time the Ofgem cap comes down. This figure is more than Britons have ever paid before and is more than double the £1,360 annual average in 2019.
At the same time, the Energy Bill Support Scheme – dispensing a lump sum of £400 to homes off-grid – will also come to an end.
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Windfall levies imposed on oil, gas, and renewable energy producers are also expected to bring in £54billion over six years. The Treasury says this will “help fund energy bill support for households and businesses” but the latest insights suggest it may not be necessary.
A Department for Energy Security and Net Zero spokesperson said: “Government support will continue to help households with their energy bills.
“We know this is a difficult time for families, which is why the Government has covered around half of the typical household’s energy bill this winter, and by the end of June the Energy Price Guarantee will have saved a typical household in Great Britain around £ 1,000 since it began in October.”
“In the meantime, we’re committed to helping people with rising costs by reducing inflation and growing the economy. The cost of energy has already been falling and we expect this to drop further over the coming months, which we fully expect suppliers to pass onto their customers.”
