People are only just realising energy bills are NOT capped at £2,500 – how the price guarantee works | The Sun

EARLIER this month a major change to the energy price guarantee was made – but people are still confused about what it means.

Facebook users have taken to the site to ask why their bills are already expected to be higher than the £2,500 price cap.

Energy bills were initially set to be frozen at £2,500 for the typical household for two years.

New Chancellor Jeremy Hunt then announced in mid October that the guarantee will only last until April.

The emergency measures came into place on October 1 to help with soaring bills as the cost of living worsens.

It applies to customers on standard variable tariffs.


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It sees the Government limit the price suppliers can charge customers for units of gas, and replaced the price cap set by regulator Ofgem.

But some bill payers don't know the guarantee to freeze bills is just the amount energy suppliers can charge – if you use more energy, your bill could still be higher than £2,500 a year.

One woman posted in Facebook group Energy Saving Tips asking for clarification on the cap.

She said: "Hi there, can anyone explain the price cap on energy to me?

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"I know it said prices capped at £2500, but I got my first energy prepayment voucher of £66 one week ago and its gone already, I live in an all electric house but I've not had the heating on and hardly anything else as I've just moved in.

"This is horrendous, it's not even winter yet! God knows how we will manage when it gets cold.

"At these prices I'm well over the £2500 price cap. Thank you."

Another wrote: "Am I missing something but.

"I believe that with the 'energy price cap' capped by the Government and a £65 a month subsidy applied directly by the supplier .

"My energy this winter (if I use same amount as last year) will be LESS than last year?"

While one woman commented under a post attempting to explain the guarantee: "I don’t understand any of it my bill was still massive despite the fact that I have not turned on the heating or the hot water for months now."

Others also wrote to say that they find it "very misleading".

When the cap was first announced in September, research by Uswitch found that nearly two in five households thought the new Energy Price Guarantee completely stopped bills from going over £2,500.

Below, we explain what the changes mean for you, and how much you might expect to pay depending on the type of home you live in.

Consumer expert Martin Lewis has also explained how to calculate what your bills might be.

What is the energy price cap?

The energy price cap sets a limit on the unit price and standing charge that companies can bill their customers.

The cap is based on wholesale prices over a six month period.

It was set to soar to £3,549 on average per year from October 1.

But the energy price guarantee replaces this – and bills will be frozen at £2,500 for the typical household.

It only means firms will be limited on what they charge customers. You pay for how much energy you use, so your bill could be higher than £2,500 a year.

The price cap affects millions of people on default or standard tariffs offered by the country's energy providers, according to Ofgem estimations.

An increasing number of energy users are on the price cap as there are limited fixed deals left out there on the market.

The price cap was originally set up in January 2019 by Ofgem, in a bid to limit how much providers can charge on default energy bills to spare Brits from being unfairly charged.

It has soared to eye-watering heights this year due to the energy crisis.

What does the price guarantee mean for you?

The energy price guarantee means the average household will save £700 on their yearly energy bills, according to the government.

But not everyone will see their yearly costs stay below £2,500.

Those in detached homes' average yearly bills will be £3,300, while semi-detached homeowners will see theirs reach £2,650.

All other types of household will see their average energy bills priced below £2,500 though, including flat and bungalow owners.

Those on a duel fuel standard tariff that pay their bills by direct debit are will pay a unit rate of:

  • 10.3p per killowatt hour (p/kWh) for gas
  • 34p/kWh for electricity
  • A standing charge of 27p per day for gas
  • A standing charge of 45p per day for electricity

The amount can vary very slightly based on the company you're with, where you live and how you pay your bill.

For more information on how costs can differ depending on the size of your home see here.

How can you save money on your energy bills this winter?

We regularly bring you cost cutting ways to keep your energy bills down, here are a few of the easiest ways.

Putting radiator foil – or tin foil if you're on a tight budget – behind your radiator could save on your energy bills every time you whack the heating on.

TikToker Kyle Mattison AKA ThatPropertyGuy revealed neglecting to bleed your radiators could force them to work harder, and it means you could end up wasting energy heating nothing.

To save the most money, you want to stop cold air coming in and prevent warm air from escaping.

DIY draught-proofing starts at just over £3 for a roll of self-adhesive draught-excluding tape though.

Switch to using LED lights in your home, one bill payer saved £40 a month on energy by using all LEDs.

Only boil what you need, overfilling the kettle and leaving it on standby are two ways you might be wasting cash.

You can pop foam tubes over pipes in rooms you don't want to heat up – such as the attic or basement – as well as external pipes.

What help is already available?

Over six million people with disabilities are now receiving £150 to help with the rising cost of living.

From October 1, all UK households began receiving the £400 energy bills rebate.

The payment will be made up of six discounts between October and March next year.

Households will receive a £66 energy bill discount between this month and November and a discount worth £67 in December, January, February and March.

We've listed how the leading energy suppliers plan to pay households the discount and are waiting on others to respond.

The way you'll be paid will depend on how you pay for your energy.

If you're on a credit meter the discount will come off your bills, but if you're on a prepayment meter you'll get a voucher.

Check with your supplier to confirm how you'll receive the cash.

From tomorrow, a £300 one-off "pensioner cost of living payment" will be paid out to eight million households.

It will be given to those who already get the winter fuel payment – which is worth between £100 and £300 for those over the state pension age.

Millions of households are in line to get the £150 Warm Home Discount between December and March 2023.

There are plenty of energy grants and schemes open to help you out if you're struggling.

British Gas has recently confirmed that it'll pay its most vulnerable customers grants worth £750 to help with sky-high bills.

The British Gas Energy Trust has previously paid struggling households up to £1,500 – and you don't need to be a British Gas customer to apply for this help.

Ask your supplier what's on offer and how to apply, or check here:

  • Bulb energy fund
  • EDF's energy customer support fund
  • E.on's energy fund
  • Octopus Energy Octo Assist fund
  • Ovo's debt and energy assistance
  • Scottish Power's hardship fund

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Universal Credit claimants will also receive an extra cash bonus on top of the second half of the £650 cost of living payment that will be landing in bank accounts from November.

In December, millions of people who claim UC and other benefits will be able to get their hands on an extra Christmas bonus cash boost – find out more here.

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