The government’s new Energy Price Guarantee will keep bills below the levels we were expecting – but how much will we pay?
We were all fearing what the winter months would bring in terms of energy bills, so what is the government’s new Energy Price Guarantee likely to mean?
An updated energy price cap had been announced in August. It would have seen average bills for those of us with prepayment meters rise to £3,608. If we pay by Direct Debit, an average bill would have gone up to £3,549.
It left many of us wondering how we’d pay – especially as prices were due to rise again in January 2023. Some were predicting average bills would soar to more than £5,000.
But now the Energy Price Guarantee will cap the unit price of the energy we use at a lower level than we expected.
The numbers have been crunched and an average bill will come in at around £2,500 a year. It’ll be frozen at this level for the next two years.
It’s NOT a cap on bills!!!
The most important thing to remember about the Energy Price Guarantee is that it’s not our bills that are capped. It’s the cost per unit of energy.
That means that the more we use the more we spend. But it also means that there may be things we can do to cut the amount we have to pay.
Although they haven’t risen by much, the standing charges will mean we’re paying about 74p a day before we’ve even turned a light on (if we have both electricity and gas in our home).
The average charges are 46p per day for electricity and 28p per day for gas. These charges cover the costs of supplying the energy to our home, a bit like line rental for our phones.
Every household will still get the £400 energy bills support that was promised before the guarantee was announced. There’s also a range of other payments that we may be entitled to during the cost-of-living crisis.
But if we can safely use less energy, we’ll be able to keep bills a bit lower.
Getting through the winter
At Quids in! we’ve been looking at ways of saving cash for years. But things are tougher than we can ever remember right now so we have to go even further.
It’s about taking a 360-degree look at our finances and making sure we’re getting everything we’re entitled to and not spending anything we don’t have to.
Our Future-Proof Finance Quiz can help us focus on our finances and spot any areas where we can become better off. It’s easy and safe – just 25 quick questions.
We should also do a benefits calculator – there’s one on the Quids in! website. We may think we’re claiming everything we’re entitled to, but circumstances and benefits change, so it’s well worth our time.
There’s also a free Quids in! Energy Guide magazine, which is full of advice and tips.