What is the energy price cap?

The energy price cap limits the price of a single unit of energy for customers paying for variable energy tariffs. It's designed to protect energy customers who haven't secured a fixed tariff. 

From 1 October 2022, the price cap has been superseded by the Energy Price Guarantee (EPG). This will be in place for all domestic energy customers until April 2024. 

Until July 2023, the EPG freezes unit rates for gas and electricity at an average 33.2p per kWh for electricity and 10.3p per kWh for gas. This makes typical energy bills around £2,500 per year, or £208 per month.

After then, the EPG will rise to make typical energy payments around £3,000 per year, until April 2024. 

However it's unlikely that you'll pay the July increase because the next time energy regulator Ofgem changes its prices (from 1 July) they're expected to drop below the rate of the EPG. Energy customers pay whichever is the cheapest.

Ofgem's price cap changes every three months and, when it's higher than the government's EPG, the government pays the difference. 

With such high energy costs over winter, the government provided extra support - called the Energy Bills Support Scheme. Most households received their final support payment in March.

Keep reading to find out how you qualify for the EPG and the Energy Bills Support Scheme. It depends on how you pay for your gas and electricity. Plus what they could mean for your future energy bills.

Get our latest cost of living news and advice to help support you

What is the Energy Price Guarantee?

The EPG caps the average gas and electricity unit rates from 1 April to 1 July 2023. Standing charges were set by Ofgem, also from 1 April.

If you are on a variable tariff in England, Scotland and Wales, they currently work out at around:

• Electricity: 33.2p per kWh with a standing charge of 53p per day
• Gas: 10.3p per kWh with a standing charge of 29p per day 

That's based on a household using a 'typical' amount of energy (set at 12,000kWh of gas and 2,900kWh of electricity). Your rates will be slightly different based on where you live and the sort of tariff you have. 

From July 2023 to April 2024, the EPG will continue but it will be less generous. We don't yet know what the unit rates will be in this time period but they're projected to increase.

How much will I pay under the Energy Price Guarantee?

To work out how much your bills may be, multiply your annual usage in kWh for each fuel (this should be on your energy bills, or you can estimate it yourself based on your meter readings) by each of the rates above respectively to find out what you're likely to pay over the year. Don't forget to divide by 100 to get a price in pounds rather than pence. 

You'll also need to add £299 per year, which is what the current average standing charges add up to if you pay for both fuels (gas and electricity). Your direct debit payments, if they are monthly, should be roughly this total figure divided by 12.

We've run the new electricity price through our lab energy use data to show you how the EPG could affect how much it will cost to run appliances. 

Find out how much household appliances cost to run in April 2023.

Read more on: how to estimate your household's energy use

How do you get the Energy Price Guarantee?

It will be applied to your energy bills automatically; you don't need to do anything. 

Your energy supplier should have told you exactly how the EPG will affect your specific prices. However, all households' energy payments will be lower than they would have otherwise been. 

Here’s how the EPG applies to you based on the energy tariff you have (if you’re in England, Scotland and Wales):

Variable tariff

• Your unit rates will be capped at prices close to the averages - 33.2p per kWh of electricity and 10.3p per kWh of gas. Your specific prices will vary depending on where you are in the country and your method of payment.
• You don’t need to do anything to get the EPG applied to your bills.

Fixed tariff 

• If you have fixed a tariff with unit rates higher than 33.2p per kWh of electricity and 10.3p per kWh of gas, your unit prices will be reduced down to this level.
• This reduction is to a maximum of 16.6p per kWh for electricity and 2.2p per kWh for gas - so some people with extremely high fixed rates may find their bills are still a little higher.
• You don’t need to do anything to get the EPG applied to your bills.

If you pay by direct debit

• Your direct debit payments should take into account these unit prices. 
• Your energy company will let you know what your monthly or quarterly payments will be between April and July 2023. 
• You don’t need to do anything to get the EPG applied to your bills.

If you have a prepayment meter

• The EPG will also cap the rates you pay for each unit of energy.
• You don’t need to do anything to get the EPG applied to your bills.

Find out more about: different types of energy tariff

What does the energy price cap mean?

The price cap was introduced by Ofgem in 2019 to ensure fair prices for customers who don’t actively switch energy provider to make the most of deals. It's different to the EPG.

It only affects variable tariffs - also known as standard, default or out-of-contract tariffs.

It's set based on wholesale energy rates. When they're high, it doesn't protect people from getting huge energy bills.

In recent years, most people would have been on fixed energy tariffs and therefore not affected by changes to the cap. But because competitive fixed deals all but vanished from the market in autumn 2021, many households currently paying variable rates for their energy. 

The cap is currently reset by energy regulator Ofgem every three months.

It’s not a cap on your payments, but a limit on the amount that suppliers can charge for each unit of energy you use and your daily standing charge, if you're on a variable or default tariff. How providers split the unit rate and standing charge is up to them, and dependent on the region you live in, but the total cost cannot be higher than the cap.

The widely reported figure for the price cap (e.g. £3,280 between April and October 2023) is an illustration based on what it might cost for a household using a medium amount of energy, defined as 12,000kWh of gas and 2,900kWh of electricity per year. This means the cap might look very different for your circumstances. 

Find out more about: how to estimate your household's annual energy use.

What's the difference between the EPG and the price cap?

The EPG is a government-led scheme. It caps average energy unit rates beyond the rates of the price cap. 

It only applies to unit rates (and not standing charges). The unit rates you pay under the EPG differ slightly based on where you live and the sort of tariff you pay for. 

The price cap is set by energy regulator Ofgem. The standing (or daily) charges you pay for your gas and electricity are determined by it.

It's recalculated every three months and determines how much energy providers can charge for a unit of energy. It doesn't directly affect your bills because the government pays for the difference between the price cap and its EPG. 

However the price cap is still important in determining how much the scheme will cost the government (and eventually, taxpayers) in the future. 

How the government's £400 energy support will be paid to you

The Energy Bills Support Scheme (EBSS) was £400 paid to most customers in six monthly instalments (from October 2022 to March 2023) of £66 or £67. 

You didn't need to apply to receive it. Most people had it it automatically credited to their energy account but it depends on how you pay for your energy. For households in England, Scotland and Wales:

• If you pay for electricity by direct debit the money was either automatically credited to your energy account (in which case your monthly direct debit amount was reduced), or returned to your bank account each month following your direct debit payment.
  
• If you pay by standard credit or payment card, your discount was automatically applied as a credit to your account in the first week of each month. The credit appeared as it would if you had made a payment.
• If you have a smart prepayment meter, the money was credited directly to your smart prepayment meter in the first week of each month
• If you have a traditional prepayment meter, you get the discount either as redeemable vouchers (sent by SMS text, email or post) or as an automatic credit when you top up at a top up point. 
  

Your energy supplier should have told you how you'll receive your support payments. Make sure your supplier has your up-to-date contact details so you don't miss out.

If you have a traditional prepayment meter and get vouchers, you'll need to redeem them at the Post Office or your local shop with a PayPoint sign. Your discount will be credited to the meter key. 

Vouchers are valid for 90 days from when they're issued so it's worth using them to top-up sooner rather than hanging on to them. You can ask your supplier to reissue your vouchers if they expire. All vouchers must be redeemed before 30 June 2023.

You'll need a UK driving license or utility bill which has the same name and address as your energy account. You will never be asked for personal information (such as bank details) to receive your payment.

Find out how many prepayment energy vouchers are still unclaimed.

Energy support payments if you live in Northern Ireland, don't have mains gas or an electricity supplier

Homes in Northern Ireland are eligible for a one-off payment of £600. This is £400 as part of the government's Energy Bills Support Scheme Northern Ireland (EBSSNI) and £200 from the Alternative Fuel Payment (AFP) scheme. You'll get this regardless of how you heat your home.

Unlike the rest of the UK, you'll get your payment all in one go. 

If you pay by direct debit, your energy firm will pay it into the bank account from which you pay. 

if you have a prepayment (keypad) meter, you'll be sent a voucher. All 500,000 vouchers have been sent out, the Post Office said on 7 February, so you should have received yours. You'll need to go to the Post Office to redeem it.

If you don't get your energy directly from an energy supplier, you're eligible for £400 (as part of the EBSS Alternate Funding scheme). This could be you if:

• you live in a houseboat or caravan and can provide proof of address
• you live in a park home
• you live in a care home (or other sheltered accommodation) pay for all or part of your care
• you're a tenant in private or social rented homes and pay for energy through your landlord
• you're a traveller
• your home is on a heat network or private wire
• your home is off-grid
• you live in a farmhouse that's only used for domestic purposes.

You need to apply online or by phone to receive your payment:

• To apply online, go to the government website (gov.uk) and search 'apply for energy bill support if you do not get it automatically'. You'll then need to complete a form.
• To apply by phone, call 0808 175 3287 if you live in England, Scotland or Wales. Call 0808 175 3894 if you live in Northern Ireland. The government helpline is open Monday to Friday, 8am to 6pm.

If you are unable to apply yourself, a trusted family member, friend or carer can apply online on your behalf.

You will never be sent a link from government to apply for your support. If you receive a link by email or text, it is likely to be a scam.

You will be paid the £400 as a lump sum directly into your bank account via your Local Authority. Applications are open until 31 May 2023.

If you heat your home using an alternative to mains gas - for example heating oil, LPG or biomass - you're eligible for extra support from the government. This is called the Alternative Fuel Payment (AFP).

You're eligible for £200 to help with the high costs.

If you have an electricity supplier but don't use the gas grid, the payment will be made into your electricity account automatically. The first payments were made on 6 February. All payments should have been received by 10 March, the government says.

If you don't have an electricity supplier, you'll need to apply by May 2023:

• Online, go to the government website (gov.uk) and search 'apply for alternative fuel bill support if you do not get it automatically'. You'll then need to complete a form.
• By phone (if you cannot apply online), on 0808 175 3943. The helpline is open Monday to Friday, 8am to 6pm. 

You will need to show proof (receipts, for example) that you use alternative fuels as your main heating source. These must be dated from June 2022 (an extension of the previous cut-off of September 2022). A government spokesperson said: 'This is to recognise that many will have bought fuel ahead of winter price rises - and it is right that these households aren't penalised'.

You'll get an email or letter to tell you the progress of your application. You should get a response within six weeks.

Watch out for energy scams

Scammers have been using the cost of living crisis as a means of duping people into making payments and/or handing over their bank details, so make sure any communication you receive purporting to be from the Department for Work and Pensions (DWP), your energy supplier or any other organisation is legitimate. 

There is no need to apply for the energy discount unless:

• you don't get your energy directly from an energy supplier
• you use an alternative fuel for heating and don't have an electricity supplier.

The government will not send you a link to the application form (you'll need to find it on gov.uk yourself), nor ask for your bank details. Watch out for any communication that suggests otherwise.

Additional cost-of-living payments for vulnerable households

As well as the £400 electricity discount, targeted support for pensioners, those on low incomes and those with disabilities is also available.

£900 for those receiving means-tested benefits

Some 8 million of the lowest income households in the UK each received a £650 cost of living payment on top of the EBSS in 2022 and will get £900 in 2023-24. 

To be eligible, you must be receiving certain means-tested benefits. This includes Universal Credit, tax credits, pension credit and other means-tested benefits. 

The money will be paid directly into people’s accounts from the Department for Work and Pensions (DWP) in five lump sums:

• £326 in July 2022
• £324 in autumn 2022
• £301 between 25 April and 17 May 2023
• £300 in autumn 2023
• £299 in spring 2024. 

You should receive the payments automatically if you are eligible.

If you think you are eligible for the payment and can't see it in your bank, building society or credit union account, you can report it to HMRC here.

£150 for those receiving non-means-tested disability benefit

If you’re one of the six million people who receive non-means-tested disability benefits, you’re entitled to an extra one-off cost-of-living payment worth £150. 

It's paid automatically. In 2023, payments will be made in the summer. We'll update this guidance when the payment dates are announced.

Any people with disabilities who also receives means-tested benefits can receive both the £900 cost of living payments above and this £150, bringing your total additional payment to £1,050.

£300 for pensioners receiving Winter Fuel Payment

Pensioners who currently receive the government’s Winter Fuel Payment – set up to help cover the costs of energy bills during the colder months – will be given an extra one-off sum of either £150 or £300 with their normal payment in November 2023.

To be eligible for the Winter Fuel Payment, you must be born on or before 26 September 1956. Whether you'll get an extra £150 or £300 on top of your usual payment depends on your age and circumstances.

Those on lower incomes who claim pension credit will also receive the £900 as part of the means-tested benefits package above.

Find out more about what help is available if you're struggling to pay your energy bill

Other ways to reduce energy bills this spring

Any cutbacks you can make to your energy usage could help soften the blow of increasing bills. Some ways to do this are:

• Lowering your combi boiler's flow temperature – This small tweak can lower your gas bills while still keeping your home warm. Find out how to adjust your boiler flow temperature.
• Turning down thermostatic radiator valves in unoccupied rooms – Keep the heat you generate in the rooms that need it so that your central heating isn't on for as long. 
• Heat the person, not the home – This isn't possible for all households, but if you are able to, it's usually cheaper to heat yourself rather than the whole house. Look for electric blankets and heaters for quick bursts. 
• Only use white goods efficiently – Try to only put your washing machine and dishwasher on when they're full and use eco settings where possible. Washing at 30^oC or below is usually more energy efficient than hot washes.
• Add loft insulation and draft proofing – Improving your loft insulation is a good way to make your home feel cosier in the winter months and bring down your bills. Draft proofing can be a cheap way to get started.

When it comes to your payments, you might be able to make small savings by opting for paperless bills and managing your account online (as some suppliers charge extra for paper bills). Getting a smart meter installed, or sending regular meter readings, will ensure your bills are accurate. 

Find out more about ways to save on your energy bills