Five tips for consumers as the Energy Price Guarantee comes into effect
The new Energy Price Guarantee (EPG) will apply from Saturday, October 1, replacing the £1.971 price cap that applies now.
Yesterday Prime Minister Liz Truss claimed “no one” will pay energy bills above £2,500.
The EPG freezes bills at £2,500 – but that’s just the typical energy bill, it can be higher or lower depending on your usage.
Ms Truss was defending her government’s economic policies in a series of interviews with BBC local radio stations on Thursday morning.
She told BBC Radio Kent that the government was “making sure that nobody is paying fuel bills of more than £2,500”,
Speaking to BBC Radio Leeds, Truss repeated the claim saying: “through the energy price guarantee the maximum will be £2,500”.
The UK Government’s Energy Price Guarantee caps the price of a unit of gas and electricity, meaning that the average household will spend £2,500.
It does not, as the Prime Minister stated, ensure that no household pays more than £2,500 for their energy bills.
Following the Prime Ministers’ interviews, Money Saving Expert Martin Lewis pointed out that the new cap doesn’t limit what people will pay, and will depend on their usage.
On Twitter, he said: “There is no £2,500 cap on energy bills.”
“Instead, the new 1 Oct guarantee, like the old caps, limits daily charge (28p gas, 46p elec) and Unit rates (10p/kWh gas, 34p/kWh elec).”
“So use more, pay more. £2,500 is just what someone with avg use’d pay.”
Pls share to stop confusion.
THERE IS NO £2,500 CAP ON ENERGY BILLS.
Instead the new 1 Oct guarantee, like the old caps, limits
– Daily charge (28p gas, 46p elec)
– & Unit rates (10p/kWh gas, 34p/kWh elec)So use more, pay more. £2,500 is just what someone with avg use’d pay
— Martin Lewis (@MartinSLewis) September 28, 2022
Consumer champion Which? has published 5 tips for consumers as the energy price guarantee come into effect:
1, Remember that the guarantee does not mean all bills will be frozen at £2,500. The energy price guarantee means that the amount you pay for each unit of electricity and gas will be capped. Electricity will be capped at an average 34p per kWh and gas an average 10.3p per kWh for domestic households paying by direct debit. This support would mean a household using the ‘typical’ amount of energy would see annual bills of around £2,500 – if you use more or less energy than the average then your bills will be higher or lower.
2, Remember that you will receive an additional £400 government support. For most customers, this will be automatically paid in monthly installments of around £66 via your energy provider. People with traditional (non-smart) pre-payment meters will receive the discount via vouchers either in the post or via text or email.
£650 will also be paid to the lowest income households’ bank accounts in two lump sums – one has already been paid and the second will follow in autumn. There will also be an additional £150 one-off cost of living payment for those who receive disability benefits and an extra £300 for pensioners. Both these payments will be received in autumn – the disability payments are already being received.
Unfortunately, scammers are trying to take advantage of this situation. Remember that you do not have to do anything to get this support. If you receive any emails or texts pretending to be from Ofgem or your supplier which you think are suspicious, contact your supplier directly to verify the information.
3, Take and submit your meter readings before 1st October. Remember to take your meter readings before 1st October. This ensures that you will be charged the right amount for any energy used before the changes take place. Most providers will let you submit a backdated reading for a week or so, so don’t worry if you can’t get through straight away.
4, Pay by paperless monthly direct debit if you can. Paperless monthly direct debit is usually the cheapest way to pay for your bills – try to stay on this if you possibly can.
5, Get in touch with your energy provider if you’re struggling to pay. If you think you will struggle to afford your bills this winter, the first port of call is always to get in touch with your supplier – they have an obligation to help you find a payment plan you can afford.
Energy companies are obliged to help you if you tell them you are struggling to pay. Let them know you are struggling with your bills and that you want to establish a payment plan that works for you. Discuss whether you can keep your direct debits lower.
Emily Seymour, Which? Energy and Sustainability Editor, said:
“On 1st October, the government’s energy price guarantee will come into effect, limiting the amount you can be charged per unit of gas or electricity. However, the new rates are still higher than they have been up to this point.
“That means anyone without a smart meter should remember to take their energy readings on or around 30 September so they can make sure they’re charged the correct amount for any energy used before the changes take effect.
“People will also receive a £400 discount off their energy bill on top of the energy price guarantee from October to March. For most customers, this will be automatically paid in monthly installments of around £66 via your energy provider. Most pre-payment meter customers will receive the discount via vouchers either in the post or via text or email.
“If your bill increases by more than expected or you are unclear about exactly how you will receive the discount, then you should get in touch with your energy supplier.”
