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Help with energy bills expected to last past April

Rebecca Goodman
Written By:
Rebecca Goodman

Some energy providers are preparing for government support to remain in place until June to help customers with rising bills, it has been reported.

The current government help has capped the price of energy at £2,500 a year, under the Energy Price Guarantee.

This is due to rise to £3,000 from April but the BBC has reported that some providers are expecting the current support to remain in place.

It has also been reported in The Times that the guarantee will last for another three months, until June, at which point wholesale prices are expected to have fallen so much that the guarantee will no longer be needed.

This is because since the initial price guarantee was set up last year, there has been a big fall in wholesale energy prices. They are down by more than 70% from their peak last August, according to think tank The Resolution Foundation.

This means the government has spent less than it originally planned on providing help to households struggling with high prices.

The news comes as it was reported this week than more than three million people are now in fuel poverty in England.

The Energy Bill Support Scheme, offering £400 towards the cost of bills, is also due to end in April.

Ofgem also announced this week that its price cap would be £3,280 from April, yet if the price guarantee remains in place it will override this.

Nothing has been confirmed or announced by the government yet, but many in the industry are expecting an announcement to be made at the upcoming budget on 15 March.

The energy consultancy Cornwall Insight has also suggested that due to the falling wholesale costs, providers may start offering more fixed-rate deals soon.

‘Some respite for households facing an onslaught of heightened costs’

Myron Jobson, senior personal finance analyst, interactive investor, said: “The rumour mill is making all the right noises for billpayers who face paying 135% more, on average, on energy bills than they did in winter 2021/2022 from April.

“The retention of the current level of support under the government’s energy price guarantee scheme would offer some respite for households facing an onslaught of heightened costs in April, with council tax, broadband, mobile phone, water and sewage bills all set to rise.

“Low-income households are particularly exposed to hikes in energy bills as they spend a higher proportion of their budget on essentials.

“If you are struggling to pay your energy bills, contact your energy supplier to ask for support as your first port of call. It is worth consulting a debt advice charity such as StepChange or Turn2Us and they will go through all of your options.”