Without intervention, the average household energy bill would have jumped 80 percent to £3,549 a year from £1,971, based on typical use. The energy price cap has historically been set by the energy regulator, Ofgem, and dictated the amount energy suppliers can charge customers on their standard variable tariffs. Ms Truss announced that the Energy Price Guarantee (EPG) freeze would be implemented from October 1.
With the Price Guarantee, if a person is on a variable tariff which is paid by direct debit, the amount which is paid per kilowatt hour will be capped at an average 34p for electricity and 10.3p for gas.
The word “cap” can be confusing, as the Energy Price Guarantee and the Ofgem price cap is a cap on the price of the unit and not the price of the bill.
The average standing charge for the UK is around 46p per day for electricity and 28p per day for gas, but they are different depending on where a person lives and their energy company.
With the Price Guarantee, if a person is on a variable tariff which is paid by direct debit the amount which is paid per kilowatt hour will be capped at an average 34p for electricity and 10.3p for gas.
However, the exact amount will vary depending on where the person lives. If someone is on a fixed tariff with unit rates higher than these, their rate will likely be reduced down to these levels.
People on pre-payment meters will also have their unit rates reduced by around 17p per unit of electricity and 4.2p per unit of gas.
This means that people will face higher bills if they use more energy.
Britons may look to reduce the amount of energy that they use as much as they can as Ms Truss’ Energy Price Guarantee is more than double Ofgem’s price cap from last year which was £1,138 in October last year.
Andy Kerr, founder at BOXT said: “Energy bills have still increased significantly, and consumers should be doing everything they can to reduce their energy usage and costs.
“As we head into the winter months when demand for energy is at its highest, the increase in energy consumption will still be reflected in our bills and could potentially still make people unable to afford to heat their homes.”
October is also the start date for the Government’s Energy Support Scheme which was announced by former Chancellor Rishi Sunak back in April.
The Energy Support Scheme will give all domestic energy customers £400 towards their energy bills between October and March of next year.
The Government announced the £400 payment was going to be split into six payments which will appear as a monthly discount on a person’s bill.
For the months of October and November, Britons will receive a discount of £66 bill to their energy bills.
Between December and March, that discount will increase slightly to £67.
The energy discount will not be available from April of next year and the Government has not announced or hinted at further support.
The Government also announced further financial support for vulnerable groups which will be handed to those eligible from October.
Pensioners who currently receive the Government’s Winter Fuel Payment will receive an extra one-off payment between November and December.
The latest this payment could get to people is January of next year.
Payments are between £100 to £300, depending on a person’s age and circumstance.
People in receipt of a non-means tested disability benefit will also receive an extra one-off cost-of-living payment worth £150.
It will be paid automatically from September 20 and the majority of eligible people will receive their payment within a couple of weeks of this date.