£45 energy bill cut for families with prepayment meters from July
More than four million households could benefit from the move announced in the Spring Budget
Families with prepayment energy meters are expected to see their annual energy bills slashed by £45 a year, according to the Government. The move was officially announced in Chancellor Jeremy Hunt's Spring Budget.
The news comes as households across the country have been worried about how much their energy bills will cost after months of spiralling energy prices. While families are protected from huge spikes in energy prices by the Energy Price Guarantee, the guarantee was slated to rise to £3,000 from April. But that will no longer happen, and the price guarantee will be extended at its current level until July. At that point, wholesale energy prices are expected to come down below the price guarantee.
If you and your family pay for your energy in advance of using it, make sure you try these prepayment energy meter tricks to try and keep your bills as low as possible.
Ending the prepayment penalty
Households and those on lower incomes are more likely to have prepayment energy meters, where they pay for their energy before they use it. But prepayment customers often pay more than those who have a standard energy meter and pay by direct debit, due to the additional costs to the energy supplier of managing the meters. This has long been thought to be unfair, given the fact that those on prepayment meters are likely to be the ones most vulnerable to rising prices.
While forcibly moving customers to prepayment meters was temporarily banned, there were a rising number of households remotely moved to prepayment meters. This led to the energy regulator Ofgem conducting a review into prepayment meters. It has already started telling energy suppliers to compensate those who were wrongly moved to a prepayment meter.
The planned £45 reduction in energy bills for those on prepayment meters should bring prices in line with those on standard meters. It is expected to come into force from 1 July 2023. The government will make up the shortfall under the Energy Price Guarantee. Ofgem is expected to report on how it plans to permanently end the prepayment penalty once the price guarantee is no longer in effect.
But there is good news if you are a British Gas prepayment customer. The energy supplier is cutting the prepayment penalty ahead of July. This means that around one million of their prepayment customers will benefit from an additional £15 saving.
GoodtoKnow Newsletter
Parenting advice, hot topics, best buys and family finance tips delivered straight to your inbox.
Will energy prices still go up in April?
While the Energy Price Guarantee may not rise, the final instalment of the £400 energy rebate was paid in March. This means that from April, families will not receive an automatic reduction in their energy bills so they might feel more expensive. But with warmer weather on its way and lighter evenings, you may find that you use less energy and your bills are lower to help cushion the blow of losing the discount.
When the Energy Price Guarantee came into force, it was meant to be in place for two years at an average £2,500 a year (based on typical use). But as energy prices kept rising, Chancellor Jeremy Hunt said in the Autumn Budget 2022 that while the guarantee would remain in place, from April 2023, it would rise to £3,000.
But as it's been predicted that wholesale energy prices will fall below the current £2,500 level of the price guarantee by from July 2023, there were increasing calls for the increase to be scrapped. Chancellor Jeremy Hunt confirmed in his Spring Budget that the increase has been postponed. It has not yet been announced what will happen to the Energy Price Guarantee from July.
Sarah is GoodtoKnow’s Consumer Writer & Money Editor and is passionate about helping mums save money wherever they can - whether that's spending wisely on toys and kidswear or keeping on top of the latest news around childcare costs, child benefit, the motherhood penalty. A writer, journalist and editor with more than 15 years' experience, Sarah is all about the latest toy trends and is always on the look out for toys for her nephew or Goddaughters so that she remains one of their favourite grown ups. When not writing about money or best buys, Sarah can be found hanging out with her rockstar dog Pepsi, getting opinionated about a movie or learning British Sign Language.
-
15 baby names parents love but 'don't feel cool enough' to use - would you choose one?
These baby names are a 'guilty pleasure' for parents
By Ellie Hutchings Published
-
Half of Gen Z say their parents 'don't take my mental health concerns seriously', research shows - here are 3 ways to help support older children
With research showing that half of teens and young adults feel their parents don't take their mental health concerns seriously, we share how you can show your support.
By Ellie Hutchings Published
-
Mum-of-three Helen Skelton shares 5 free and easy ways to keep kids entertained in the Easter holidays (and they all involve one thing)
Presenter Helen Skelton has revealed how parents can keep costs low when keeping the kids occupied during school holidays
By Sarah Handley Published
-
School holidays cost parents more than £3,000 according to new survey - here are 7 ways to keep costs under control
New research has revealed how much the school holidays cost parents, and it's an eye watering sum - so we've shared our top tips on how families can keep costs under control
By Sarah Handley Published
-
Childcare costs have risen by 7% in the last 12 months, according to new report - and supply shortages are still a major issue
Childcare costs have risen again, and only a worryingly small number of councils believe they have the supply to meet the demand of the final phase of the free childcare expansion, according a new childcare survey
By Sarah Handley Published
-
25% of Brits regularly hide purchases from their partner, according to new research - try these 5 tips to open up the money conversation
If you struggle to talk to your partner about your financial situation, try these five tips to get the conversation started
By Sarah Handley Published
-
Working parents of children from 9 months old will be able to apply for 15 hours free childcare from this date - here's everything you need to know
The government has announced when the application window for 15 hours free childcare from nine months old will open
By Sarah Handley Published
-
Working mothers earned 43% less than fathers in 2023 - is now the time to end the motherhood penalty for good?
New analysis shows that working mothers are still earning less than fathers as they juggle parenting and their work life
By Sarah Handley Published
-
Save up to £60 per person on days out with the kids to Alton Towers, Cadbury World and more, in the Merlin Annual Pass sale
With school holidays fast approaching, and parents scrambling for cost-effective days out with the family, the Merlin sale is well-timed
By Sarah Handley Published
-
What does the child benefit shake up announced in the Spring Budget mean for your family? Here's everything we know
Changes have been announced to the child benefit system that could leave half a million families better off
By Sarah Handley Published