Energy bill cap is frozen at £2,500
Relief for families, but £67-a-month rebate on gas and electricity axed
THE planned £500 rise in the energy price cap has been axed by Jeremy Hunt, with industry analysts predicting that bills could fall sharply this summer.
The Energy Price Guarantee (EPG) was due to increase from April 1, sending bills soaring by £500 – from £2,500 for the average household a year to £3,000.
However, this has been halted by the Chancellor, bringing relief to millions of struggling families.
There is further good news in the pipeline, with the energy research group Cornwall Insight suggesting a fall in wholesale gas and electricity prices could bring typical bills down by £500 to around £2,000. Despite the positive news for households, smallbusiness leaders fear that the same protection will not be offered to them, which could represent the final nail in the coffin for many.
The decision not to increase the price cap is expected to save households around £160 over the three months from April to the end of June. At that point, millions could see their first fall in energy bills since Russia’s invasion or Ukraine made wholesale energy costs soar.
Prime Minister Rishi Sunak said households needed ‘peace of mind’, adding: ‘We know people are worried about their bills rising in April.’
Mr Hunt added: ‘High energy bills are one of the biggest worries for families, which is why we’re maintaining the Energy Price Guarantee at its current level.
‘With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation, too.’
Rocio Concha, director of policy and advocacy at the consumer group Which?, said: ‘The Chancel
‘Bridge the gap and ease the pressure’
lor’s decision to postpone increasing the energy price guarantee to £3,000 will be a welcome relief for households across the country.
‘Keeping the energy price guarantee at £2,500 is an important step in the right direction which will offer a much-needed lifeline to families who continue to be battered by high inflation.’
Emma Pinchbeck, chief executive of the industry trade body Energy UK, welcomed the news, adding: ‘The long-term solution to the energy crisis for the UK is to reduce dependence on volatile gas prices.’
Analysts pointed out that a second scheme to help households with the high cost of gas and electricity – the £67-a-month Energy Bill Support Scheme – was being scrapped next month.
Dame Clare Moriarty, chief executive of Citizens Advice, welcomed the decision not to raise the EPG cap, but added: ‘Unfortunately it’s not all good news. The withdrawal of the Energy Bill Support Scheme will still mean the average monthly bill rises by £67 from April. Many people, especially those on low incomes, need ongoing support.’