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What is the energy price cap and how high could bills go? What is the energy price cap and how high could bills go?
(1 day later)
Typical household energy bills are being capped by the government at £2,500 a year from 1 October, in an effort to limit soaring energy costs.Typical household energy bills are being capped by the government at £2,500 a year from 1 October, in an effort to limit soaring energy costs.
The government has also announced plans to help businesses, charities and other organisations - including schools and hospitals - deal with heating costs this winter. The government has also announced plans to help businesses, charities and places like schools and hospitals deal with heating costs this winter.
What is the energy plan for households?What is the energy plan for households?
The measures to help households include:The measures to help households include:
a typical household's energy bill will rise to £2,500 a year from 1 October (from £1,971)a typical household's energy bill will rise to £2,500 a year from 1 October (from £1,971)
the "energy price guarantee" will last two yearsthe "energy price guarantee" will last two years
this is not a limit on how much you will pay - your bill depends on how much energy you actually usethis is not a limit on how much you will pay - your bill depends on how much energy you actually use
before the announcement, typical household bills had been due to rise to £3,549 a yearbefore the announcement, typical household bills had been due to rise to £3,549 a year
the plan applies to all households in England, Scotland and Wales; the "same level of support" will be available in Northern Irelandthe plan applies to all households in England, Scotland and Wales; the "same level of support" will be available in Northern Ireland
the one-off £400 fuel bill discount payments for households will go aheadthe one-off £400 fuel bill discount payments for households will go ahead
anyone who doesn't use mains gas and electricity - such as those using heating oil - will receive an extra £100 on top of the £400 discount.anyone who doesn't use mains gas and electricity - such as those using heating oil - will receive an extra £100 on top of the £400 discount.
How will the energy price guarantee work?How will the energy price guarantee work?
The energy price guarantee replaces the existing energy price cap, which sets the the highest amount suppliers are allowed to charge domestic households for every unit of energy they use.The energy price guarantee replaces the existing energy price cap, which sets the the highest amount suppliers are allowed to charge domestic households for every unit of energy they use.
These energy units are the kilowatt hours (kWh) shown on bills.These energy units are the kilowatt hours (kWh) shown on bills.
From 1 October, dual-fuel customers on a standard variable tariff will pay:From 1 October, dual-fuel customers on a standard variable tariff will pay:
34p per kWh of electricity34p per kWh of electricity
10.3p per kWh of gas10.3p per kWh of gas
On this basis, a typical household can expect to pay about £2,500 a year.On this basis, a typical household can expect to pay about £2,500 a year.
But most households aren't actually typical. Many factors - like the number of people in a house, the type of property it is, and how much heating and power they use - all make a difference.But most households aren't actually typical. Many factors - like the number of people in a house, the type of property it is, and how much heating and power they use - all make a difference.
The government has said many people on fixed deals will also receive a discount. However, those on an expensive fixed tariff could still end up paying more than those on a standard variable tariff.The government has said many people on fixed deals will also receive a discount. However, those on an expensive fixed tariff could still end up paying more than those on a standard variable tariff.
The standing charge - the fee customers pay for being connected to the energy grid - will be 46p per day for electricity and 28p per day for gas.The standing charge - the fee customers pay for being connected to the energy grid - will be 46p per day for electricity and 28p per day for gas.
What cost-of-living payments will I get?What cost-of-living payments will I get?
What can I do if I can't pay my energy bill?What can I do if I can't pay my energy bill?
Ofgem: Getting help if you can't afford your energy billsOfgem: Getting help if you can't afford your energy bills
What help will businesses get with bills?What help will businesses get with bills?
Under the Energy Bill Relief Scheme:Under the Energy Bill Relief Scheme:
wholesale energy prices will be capped for all organisations for six months from 1 Octoberwholesale energy prices will be capped for all organisations for six months from 1 October
prices will be fixed at 21.1p per kilowatt hours (kWh) for electricity and 7.5p per KWh for gasprices will be fixed at 21.1p per kilowatt hours (kWh) for electricity and 7.5p per KWh for gas
the government says this represents less than half the wholesale prices which had been expected this winterthe government says this represents less than half the wholesale prices which had been expected this winter
at present, firms aren't covered by an energy price cap in the way that households areat present, firms aren't covered by an energy price cap in the way that households are
organisations already on a fixed price contract will be eligible for the scheme, as long as the deal started after 1 April 2022organisations already on a fixed price contract will be eligible for the scheme, as long as the deal started after 1 April 2022
those on variable tariffs will receive an automatic discount for each unit of energy usedthose on variable tariffs will receive an automatic discount for each unit of energy used
the savings will begin to appear in November's bills (backdated to October) and will be applied automaticallythe savings will begin to appear in November's bills (backdated to October) and will be applied automatically
a review will be published in three months' time to identify "vulnerable" organisations that will need further support after March 2023a review will be published in three months' time to identify "vulnerable" organisations that will need further support after March 2023
The scheme will apply to all non-domestic energy customers in England, Scotland and Wales.The scheme will apply to all non-domestic energy customers in England, Scotland and Wales.
A parallel scheme, based on the same criteria and offering equivalent support, will be established in Northern Ireland.A parallel scheme, based on the same criteria and offering equivalent support, will be established in Northern Ireland.
Energy bills could break firms, warns ex-chancellorEnergy bills could break firms, warns ex-chancellor
How much will the energy guarantees cost and who will pay for it?How much will the energy guarantees cost and who will pay for it?
The government is still to set out the full cost of the schemes, but estimates suggest it could be between £130bn and £150bn. The government said its energy package will cost £60bn for the six months from October.
It will be paid for through increased borrowing. This is when the government raises money by selling financial products called bonds, which have to be paid back, usually after several years, with interest.It will be paid for through increased borrowing. This is when the government raises money by selling financial products called bonds, which have to be paid back, usually after several years, with interest.
This means taxpayers ultimately pay back more than the government raised.This means taxpayers ultimately pay back more than the government raised.
Where does the government borrow billions from?Where does the government borrow billions from?
What additional help will I get to pay my energy bills?What additional help will I get to pay my energy bills?
All households will be given a one-off £400 discount on their fuel bills from October.All households will be given a one-off £400 discount on their fuel bills from October.
In addition, £650 will be paid to more than eight million low-income households who receive many benefits or tax credits.In addition, £650 will be paid to more than eight million low-income households who receive many benefits or tax credits.
Further payments of £300 to pensioner households and £150 to disabled people will also go ahead.Further payments of £300 to pensioner households and £150 to disabled people will also go ahead.
Vulnerable families can also claim help through the Household Support Fund, the Warm Home Discount scheme, and hardship funds run by energy companies.Vulnerable families can also claim help through the Household Support Fund, the Warm Home Discount scheme, and hardship funds run by energy companies.