The four changes coming to energy bills from April

Energy bills will remain capped at £2,500 until June after the Chancellor made a last-minute decision to keep the Energy Price Guarantee.

It is one of a number of changes announced in the 2023 Budget that will affect households from April.

How much will my energy bills go up?

Energy bills were set to rise to £3,000 in April as the Energy Price Guarantee rose from £2,500, but Chancellor Jeremy Hunt chose the freeze the rate for another three months. However, as previously explained by NimbleFins, households will have to find an extra £400 as the Government's Energy Bills Discount Scheme ends. As explained in more detail below, there are still a few sources of help available.

Energy bill changes announced in Budget 2023

1. Energy Price Guarantee staying until June

The Energy Price Guarantee, which currently freezes energy bills below Ofgem's energy price cap, will remain at £2,500 until June 2023.

It was due to rise to £3,000 in April but the current rate has been extended as families continue to struggle with the cost of living crisis.

Prime Minister Rishi Sunak said: "We know people are worried about their bills rising in April so, to give people some peace of mind, we're keeping the energy price guarantee at its current level until the summer, when gas prices are expected to fall.

"Continuing to hold down energy bills is part of our plan to help hardworking families with the cost of living and halve inflation this year."

2. Prepayment meters coming in line with direct debit payments

The added expense of having a prepayment meter has been highlighted during the energy bill crisis. Customers on these tariffs are usually charged more for their energy despite being some of the most vulnerable people in society.

Prepayment meters are installed in homes as a last resort when customers can't afford to pay their bills. But the extra running costs involved with a prepayment meter means they are actually more expensive for customers.

It has also been more difficult to apply the Energy Bills Discount Scheme to prepayment meter customers as they had to redeem vouchers to secure the price reduction, while direct debit customers had the money automatically applied to their bills.

Recognising the inequality, the Government vowed to bring energy bills in line with those on direct debit.

This will save four million households an average £45 a year when the rules come into force from July 1, the Government estimates.

But prepayment meter customers may again be penalised when energy switching comes back and people can shop around for new fixed rate deals. These are generally not offered on the same scale to prepayment customers as they are to direct debit billpayers.

3. Extra benefits support

Although the Energy Bills Discount Scheme has come to an end, there are still a few ways households can be eligible for support payments.

From April there will be:

4. Energy discount ending

The Energy Bills Discount cut bills by £400 over a six month period, with the reduction handed out in monthly instalments to every household.

Those who were billed retrospectively had the discount applied automatically, while prepayment meter customers had to cash in vouchers.

This help will not be renewed after March 2023.

Energy bill help for businesses

The Energy Bill Relief Scheme sees businesses get a discount on energy with electricity costing 21.1p per kWh and gas 7.5p per kWh. Read more about the average cost of electricity per kWh in our research here.

Businesses receive the discount automatically if they are on a variable tariff. Fixed rate customers can access the discount if their tariff started after April 1 2022.

The discount was backdated to October and is only available until the end of March when a new scheme, with less financial support, will begin.

Industries which use large amounts of energy, such as steel, will get a more generous discount.

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