The UK Treasury has confirmed the extension of the Energy Price Guarantee (EPG) for three months by capping typical energy bills at £2,500 ($3,039). It will remain at the same level from April to June, worth £160 per household.
UK Chancellor Jeremy Hunt announced the extension in the Spring Budget, focusing on the impacts of soaring prices. According to the statement, government support has cut family energy bills by more than £1,300 since October.
Cornwall Insight data suggests that the previous price cap of £3,280 between April and June, introduced by UK energy regulator Ofgem, would help lower wholesale gas prices. This would help lower household bills from July to an estimated £2,100 a year for a typical household.
Hunt said: “High energy bills are one of the biggest worries for families, which is why we are 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.”
Ofgem announced on 27 February that it would decrease the price cap on consumer electricity by almost £1,000. The regulator had announced that bills would be limited to a maximum of £3280 from April.
From April, the government will support low-income and vulnerable households further and give them at least £900 in cash payments over the year. In this Autumn Statement, Hunt announced the EPG would rise on 1 April, but since then energy prices have fallen by 50%, cutting the borrowing needed to fund the energy support by two-thirds, the government statement said.
UK Prime Minister Rishi Sunak said: “We are keeping the EPG at its current level until the summer when gas prices are expected to fall. Continuing to hold down energy bills is part of our plan to help families with the cost of living and halve inflation this year.