Energy Price Guarantee

The government's Energy Price Guarantee has now ended.

The government's Energy Price Guarantee limited the amount you could be charged per unit of electricity or gas. It was designed to keep typical bills for someone paying by Direct Debit to about £2,500 a year, until 30 June 2023. So, although your total bill would still be determined by how much energy you used, your prices wouldn’t rise by as much as previously expected under the price cap.

To limit the amount customers' bills went up by, the government compensated energy firms for the difference between the wholesale price for electricity and gas they pay and the amount they could charge customers.

The history of the Energy Price Guarantee

On 8 September 2022, the government announced changes to how energy bills will be charged to help reduce the impact of the proposed October price cap. The then Prime Minister, Liz Truss, said that average bills will be held at £2,500, under the Energy Price Guarantee (EPG), for the next two years.

On 17 October 2022 the new Chancellor, Jeremy Hunt, reduced the length of the EPG scheme saying that it would run until April 2023 and not the originally proposed 'two years'. On 17 November the Chancellor said that the EPG would be extended from 1 April 2023 for a further 12 months but the level would be raised to an average of £3,000.

On 15 March 2023 the government announced that the EPG would remain at £2,500 for a further three months.

From October 2022 to June 2023, the government supplemented what customers paid for their energy. This meant that instead of the typical household dual fuel bill potentially rising inline with Ofgem's price cap (£3,549 - 1 October to 31 December 2022, £4,279 - 1 January to 31 March 2023 and £3,280 - 1 April to 30 June), it saw an average annual bill of £2,500 until 30 June 2023.

However, with Ofgem’s July price cap (£2,074 announced 25 May 2023) dropping below the government’s EPG (£2,500) from 1 July 2023, it effectively ended the government’s financial support for residential energy customers. Since 1 July 2023, customer prices have been determined by Ofgem’s price cap. On 31 March 2024, the government's Energy Price Guarantee officially ended.

What does this mean for customers?

From 1 July 2023, all unit prices will be determined by the price cap set by Ofgem.

Standard variable tariff (SVT) customers

Customers on a standard variable tariff (SVT) will see their unit prices drop to be in line with those set by Ofgem from 1 July 2023.

The specific unit rates each customer sees will vary by region and payment type. This is to reflect the different costs to suppliers of providing energy to homes and servicing the different payment methods. The regional variations for electricity, and payment type variations, were adjusted by Ofgem in the price cap calculations on 25 May 2023.

We adjusted standard variable tariffs automatically. Customers on standard variable tariffs do not need to take any action to get the benefits of the price drop set out by Ofgem’s price cap.

Fixed tariff customers

The government introduced a floor unit price because some people had fixed at a much lower price previously. This meant that their annual payments were already below the £2,500 average set by the government’s Energy Price Guarantee.

Unit price reductions of up to 17p/kWh for electricity and 4.2p/kWh for gas (1 October to 31 December 2022), 31.8/kWh for electricity and 6.4p/kWh for gas (1 January to 31 March 2023) and 16.6p/kWh for electricity and 2.2p/kWh for gas (1 April to 30 June 2023) were applied to fixed tariff customers to bring their unit prices down to (but not below) the floor unit price. Customers on fixed rate tariffs that were already below the floor unit prices continued to enjoy lower prices, but weren’t eligible to receive a further discount for the duration of their fixed term.

A small number of fixed price customers weren’t brought down to the floor, but they could switch to SVT. We wrote to these affected customers. The floor unit prices varied by region and payment type. However, the average for Direct Debit customers in Great Britain with a typical energy consumption was 34p/kWh for electricity and 10.3p/kWh for gas. These floor prices remained unchanged from 1 October 2022 through to 30 June 2023.

Standing charges

For a typical variable dual fuel customer paying by Direct Debit, the average standing charges remained in line with the levels set by Ofgem for the default tariff cap from 1 October 2022. The rates were 46p per day for electricity and 28p per day for gas. Those rates remained the same until 31 March 2023. Between 1 April and 30 June 2023, the average standing charges for customers on default tariffs remained capped in line with the levels set by Ofgem in their price cap. These rates for a typical dual fuel customer paying by Direct Debit were 50.4p per day for electricity and 27.7p per day for gas (excluding VAT).

For a typical variable dual fuel customer paying on receipt of bill (cash or cheque), the average standing charges remained in line with the levels set by Ofgem for the default tariff cap from 1 April 2023. These rates were 56.7p per day for electricity and 32.7p per day for gas, and remained at this rate until 30 June 2023.

The Energy Bills Support Scheme

This government scheme has now ended.

The Energy Bills Support Scheme (EBSS) ended 31 March 2023. Therefore, from 1 April 2023 you will no longer receive the £66 or £67 a month from the government towards your energy bills. Due to this reduction in government support, most households will experience a rise in their energy bills from 1 April. If you are a traditional prepayment customer, please be aware that all EBSS vouchers must be redeemed by 30 June 2023.

In May 2022 the government announced several support measures to help households with rising energy bills. The main measure, announced by the Chancellor, was £400 off electricity bills for domestic customers across England, Wales and Scotland. Known as the Energy Bills Support Scheme (EBSS) this money started to be credited to customers accounts from 1 October 2022 in six, monthly instalments. This money does not need to be paid back.

Each energy supplier was asked to pay customers who have an electricity supply, so this means if your electricity was with us, you'll have got your payment from Sainsbury's Energy. If you only had your gas with us, then you'll have got your rebate through your electricity supplier.

A discount of £66 was applied to your energy bills in October and November 2022, and £67 a month from December 2022 to March 2023.

We paid the money differently, depending on how you paid for your fuel:

• Fixed Direct Debit customers received the money automatically as a deduction to their monthly Direct Debit

• Pay on receipt of bill customers and regular cash payment customers saw the money automatically applied as a credit to their energy accounts in the first week of each month. This will have shown as a credit in the payments section of their monthly bill.

• Smart prepayment customers saw the money credited directly to their meters as a top up in the first week of each month.

• Traditional prepayment customers were provided with vouchers in the first week of each month. You'll need to redeem these at your usual top-up point in a similar way to the Warm Home Discount before 30 June 2023.

The government has published more information about the Energy Bills Support Scheme.

Additional government support

This government scheme has now ended.

On 21 September 2022, the government confirmed that the £400 Energy Bill Support Scheme would be extended to cover people such as park home or house boat residents, people who use alternative fuel, and those tenants whose landlords pay for their energy via a commercial contract.

Energy Bills Support Scheme Alternative Funding

This government scheme has now ended.

People in England, Scotland and Wales without a direct relationship to a domestic energy supplier, including many care home residents and those living in park homes, received a £400 discount on their fuel bills through the Energy Bills Support Scheme Alternative Funding Alternative Funding. The Energy Bills Support Scheme Alternative Funding closed to new applications on 31 May 2023.

Alternative Fuel Payment

This government scheme has now ended.

The government provided a further £200 with the Alternative Fuel Payment (AFP) to help households in Great Britain that used alternative fuels, such as biomass or heating oil. Most households eligible for the AFP support in Great Britain, received payment automatically via their electricity supplier in February 2023, with no need to take any action. Some households needed to apply for the AFP, for example, because they didn’t have a relationship with an electricity supplier. The AFP scheme closed on 30 June 2023.

Energy bills support for households in Northern Ireland

This government scheme has now ended.

All households in Northern Ireland received a single, one-off £600 payment to help with their bills. Payments began in January 2023. It was made up of £400 of support under the government’ Energy Bills Support Scheme Northern Ireland (EBSS NI), and £200 of support under the Alternative Fuel Payment (AFP) scheme, which went to all households in Northern Ireland irrespective of how they heated their home.

What other help is available?

• A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.

• A £650 payment will be made to more than eight million low-income households who receive Universal Credit, tax credits, pension credit and other means-tested benefits. The first payment of £326 started appearing in people's bank accounts from 14 July. To be eligible for the first instalment, people must have started a successful benefits claim by 25 May.

• £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax Rebate. Further details to be announced.

• The government is continuing with plans to expand eligibility for the Warm Home Discount and increase the rebate value to £150 each year (from £140). More detail will be published shortly in the government response to the consultation on this.

• The Winter Fuel Payment provides between £250 and £600 help to pay heating bills for customers born before 25 September 1956.