Energy price guarantee scheme extended until June

This extension means consumers will not feel the full force of Ofgem’s Price Cap between April and June, which stands at £3,280. Lower wholesale gas prices are expected to feed through to lower bills from July – with Cornwall Insight data suggesting the price cap will reach an estimated £2,100 a year for a typical household.  

Prime minister Rishi Sunak said: “We know people are worried about their bills rising in April, so to give people some peace of mind, we’re keeping the Energy Price Guarantee 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 hardworking families with the cost of living and halve inflation this year.” 

Chancellor Jeremy 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.” 

In response to the news, Cornwall Insight principal consultant Dr Craig Lowrey said: “The announcement that the government will maintain the Energy Price Guarantee at £2,500 has provided much-needed clarity for energy suppliers and no doubt relief for the many households who rely on the scheme to safeguard their finances from the volatile energy market.  

“While the government’s decision will come at an estimated additional cost of £2.6bn for the three months to July, Default Tariff Cap predictions indicate that the Energy Price Guarantee costs will be short-lived, as average bills are expected to drop well below £2,500 in the latter half of the year. It’s a small price to pay to protect already hard-hit households.” 

The decision forms part of the Chancellor’s Spring Budget, which will be announced in full later today (15 March).