Average home energy bills will hit £3,000 a year after April

Household energy bills will rise 20 percent on average to £3,000 next April after the government said it would only continue to partially subsidize higher prices.

The government’s energy price guarantee that started last month will limit average bills to £2,500 until spring alone, saving the Treasury £14bn. Initially it was intended to keep bills at this level until 2024.

But the government will shield up to 24 million households from some of the future increase by capping the average dual fuel charge to a level that will keep average bills at £3,000 for a year until April 2024.

The Treasury also said it would review the energy bill relief scheme that capped costs for small businesses until the end of next March. He said the overall scale of support “will be significantly smaller and targeted at those most affected.”

Gasoline prices are expected to stay high for at least the next two years, according to the Office for Budgetary Responsibility. Earlier this month, consultancy Cornwall Insight forecast that the average household would pay £3,702 a year if the warranty was not extended.

In April last year, Ofgem’s energy price cap was £1,138 for the average household, more than two and a half times less than next year’s guaranteed price.

Since April, the government has said it would consult on “amending the scheme so that those who use large volumes of energy are capped on state support, while the vast majority of households can continue to benefit.”

There will also be no return of the £400 energy rebate that all households with an electricity meter now receive after that scheme ends in April. All households should have received the first two installments of six of £66 or £67 since October.

Instead, the government announced a £11.3bn support round that will give money to those on employment benefits, retirees and those on disability benefits. In 2023-24 these groups will receive £900, £300 and £150 respectively.

Those off the gas grid using alternative fuels such as LPG and heating oil will see the support they receive double from £100 to £200 in 2023-24.

Richard Neudegg of comparison site Uswitch said: “The impact of the changes will be felt mainly in the winter of 2023, when energy use is high and there is no £400 cushion of support. While there’s a lot of talk about average numbers, it’s important to remember that bills aren’t frozen. The energy price guarantee is a cap on the unit rate for the energy you use, not a cap on your final bill. The less energy you use, the less you’ll pay, but it’s important to manage your energy use safely.”

The government has also pledged to spend a further £6bn between 2025 and 2028 to improve the energy efficiency of homes and reduce bills by 15% by 2030 compared to last year.

England’s housing stock is poorly insulated, with 58% of privately owned homes having an energy efficiency rating of D or below, according to the latest English Housing Survey, in 2020-21.

The rise in energy prices since last fall has already convinced households to pay more attention to their use and make their properties more energy efficient where they can.

The Energy Saving Trust, a government-run organization that provides consumer advice, said visits to its website were up 20 percent compared to last year. Among its most popular pages were those on installing solar panels, the most energy-consuming appliances, and how to better insulate your home.

“As energy prices remain high, we know many people are looking for quick ways to save energy and money on their bills,” said Angela Howarth, from the trust.

“People are looking for clear advice on which home energy efficiency improvements will make the biggest difference to their bills, and clarity on how they can benefit from financial support.”

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