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What is the energy price cap and what will happen to bills? What is the energy price cap and what will happen to bills?
(about 2 months later)
Help with energy costs will be less generous from April, with bills for a typical household going up to £3,000, Chancellor Jeremy Hunt has announced. Help with energy costs will be less generous from April, with bills for a typical household going up to £3,000.
However, there will be additional support for the most vulnerable. However, there will be more support for the most vulnerable.
The assistance provided to businesses is also expected to reduce from March.
What extra support will be available?What extra support will be available?
From April, some groups across the UK will receive cash payments from the government to help with energy costs: From April, some groups across the UK will receive cash payments to help with energy costs:
£900 to households on means-tested benefits£900 to households on means-tested benefits
£300 for pensioner households£300 for pensioner households
£150 to people on certain disability benefits£150 to people on certain disability benefits
Further details will follow.Further details will follow.
What help has the government already provided with energy bills? What help is the government providing with energy bills?
What is the energy price guarantee and how is it changing?What is the energy price guarantee and how is it changing?
Under the current energy price guarantee, a household using a typical amount of gas and electricity can expect to pay £2,500 annually. Under the current energy price guarantee, a household using a typical amount of gas and electricity will pay £2,500 annually.
The guarantee began in October, and was originally meant to last for two years, before the government announced it would end in April 2023. The guarantee began in October, and was originally meant to last for two years, before the government said it would end in April 2023.
Mr Hunt has now said the guarantee will continue, increasing by £500 to £3,000 from April. Chancellor Jeremy Hunt then said the guarantee would continue, increasing by £500 to £3,000 from April.
Without government support, the average energy bill would have risen to £4,279 in January 2023, regulator Ofgem says. Without government support, the average energy bill would have risen to £4,279 in January 2023, regulator Ofgem said.
Previously, Ofgem set the maximum suppliers could charge households per unit of energy.Previously, Ofgem set the maximum suppliers could charge households per unit of energy.
But after prices soared in the wake of Russia's invasion of Ukraine, the government announced its price guarantee would replace this energy cap.But after prices soared in the wake of Russia's invasion of Ukraine, the government announced its price guarantee would replace this energy cap.
Do I live in a typical household?Do I live in a typical household?
The £3,000 annual price for a typical household is based on a direct debit customer using 12,000 kWh (kilowatt hours) of gas and 2,900 kWh of electricity a year. The £3,000 figure for a typical household is based on a direct debit customer using 12,000 kWh (kilowatt hours) of gas and 2,900 kWh of electricity a year.
A kilowatt hour is a unit of energy used to calculate your bill.A kilowatt hour is a unit of energy used to calculate your bill.
However, most households aren't typical, and bills depend on how much energy you actually use, which depends on the number of occupants, the type of property and how energy efficient it is. However, most households aren't typical.
Bills are based on how much energy you actually use, which depends on the number of occupants, the type of property and its energy efficiency.
The price guarantee applies directly to all households in England, Scotland and Wales, with the "same level of support" available in Northern Ireland, which has its own energy market.The price guarantee applies directly to all households in England, Scotland and Wales, with the "same level of support" available in Northern Ireland, which has its own energy market.
Six tips for cutting home energy bills this winterSix tips for cutting home energy bills this winter
What is the National Grid doing to reduce bills?What is the National Grid doing to reduce bills?
A National Grid scheme running between November and March will reward households and businesses using less peak-time electricity. A National Grid scheme running between November and March rewards households and businesses using less peak-time electricity.
Not using high-energy appliances such as washing machines in the late afternoon or early evening could generate discounts of up to £100. Not using high-energy appliances such as washing machines in the late afternoon or early evening will generate discounts of up to £100.
Customers need a smart meter to sign up for the trial, which will run on 12 "test days".Customers need a smart meter to sign up for the trial, which will run on 12 "test days".
People will be asked not to use high-energy appliances for one hour of each test day, probably between 16:00 and 19:00. People who don't use use high-energy appliances for one hour of each test day will get up to £3 per kilowatt hour off their bill.
In return, they will get up to £3 per kilowatt hour off their bill.
What help are businesses getting?What help are businesses getting?
Unlike domestic customers, businesses were only ever promised help for six months. The government says any subsequent help will be "targeted to those most affected".
Under the energy bill relief scheme:Under the energy bill relief scheme:
businesses get a discount based on a "government supported price" of 21.1p per kWh for electricity and 7.5p per KWh for gasbusinesses get a discount based on a "government supported price" of 21.1p per kWh for electricity and 7.5p per KWh for gas
the government says this is less than half the wholesale prices which had been predicted for this winter
organisations on fixed price contracts are eligible if their deal started after 1 April 2022organisations on fixed price contracts are eligible if their deal started after 1 April 2022
those on variable tariffs will receive an automatic discount for each unit of energy used those on variable tariffs 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 automatically the savings began to appear in November's bills (backdated to October) and are applied automatically
a review will be published after three months time to identify "vulnerable" organisations needing further support after March 2023
The scheme applies to all non-domestic energy customers in England, Scotland and Wales, with a parallel scheme in Northern Ireland.The scheme applies to all non-domestic energy customers in England, Scotland and Wales, with a parallel scheme in Northern Ireland.
Unlike domestic customers, businesses were only ever promised help for six months until March 2023.
The government said subsequent help would be "targeted to those most affected". An announcement was expected before Christmas, but was postponed until the new year.
Support is expected to be cut significantly for most firms.
Why have energy prices gone up?Why have energy prices gone up?
Energy costs have soared because the conflict in Ukraine has reduced supplies of Russian gas. Energy costs soared because the conflict in Ukraine reduced supplies of Russian gas.
Prices also rose because demand for energy rocketed after Covid restrictions ended.Prices also rose because demand for energy rocketed after Covid restrictions ended.
What help have people already had?What help have people already had?
All households are automatically getting a one-off £400 discount on their fuel bills from October, although it is still not clear how the help will be delivered in Northern Ireland. All households are automatically getting a one-off £400 discount on their fuel bills, spread over six months between October 2022 and March 2023.
Eight million low-income households who receive certain benefits or tax credits are getting £650 in two payments. Households in Northern Ireland - which has its own energy market - will receive a single payment of £600 starting in January, more than in the rest of the UK because of the widespread use of heating oil.
Pensioner households are being given £300 and some disabled people will be paid £150. Eight million low-income households who get certain benefits or tax credits have received £650 in two payments.
This help is being partly funded by a temporary windfall tax on oil and gas companies. Pensioner households got £300 and some disabled people were paid £150.
This help was being partly funded by a temporary windfall tax on oil and gas companies.
Vulnerable families can also claim help through the Household Support Fund, and the Warm Home Discount scheme.Vulnerable families can also claim help through the Household Support Fund, and the Warm Home Discount scheme.
Energy companies also run hardship funds, although the regulator Ofgem warned that most firms need to do more to help customers who are struggling. Energy companies also run hardship funds, although the regulator Ofgem said most firms needed to do more to help struggling customers.
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: Help with billsOfgem: Help with bills