Energy bills: How much will they rise by from April?

Jeremy Hunt started his spring budget speech by tackling the energy bills crisis, which has dominated the cost of living crisis in recent months.

The chancellor on Wednesday announced he would extend the energy price guarantee (EPG), hailing a measure he said would "save the average family a further £160" on top of other energy support measures.

But, as the fallout from the budget gathers pace, households have been urged to be aware that, despite this, they will still face an increase of £67 per month from April.

Why will energy bills go up?

While the EPG announcement will come as a welcome relief for millions worried about their gas and electricity bills, many may not be aware of another support measure about to drop off the radar.

In May 2022, Rishi Sunak – then the chancellor – announced every household would get a £400 energy bill discount under an emergency cost-of-living package called the energy bill support scheme (EBSS).

Those payments consisted of six £66/£67 payments every month from October – which means next month will be the first time households won't notice the impact on their bills.

Experts have warned this is part of the reason why many people are “not out of the woods yet”.

Citizens Advice chief executive Dame Clare Moriarty said of the budget: “Unfortunately it’s not all good news. The withdrawal of the EBSS will still mean the average monthly bill rises by £67 from April.

“With millions already unable to afford their bills and energy prices set to remain high in the years ahead, the government must now look at long-term solutions to this problem.

“Many people, especially those on low incomes, will need ongoing support not only to pay their bills but to make their homes safer and warmer through improved energy efficiency.”

Watch: UK budget 2023: The main points

Sarah Coles, head of personal finance at Hargreaves Lansdown, also welcomed the EPG extension but added a warning of “bigger bill nightmares” to come.

She said: “Unfortunately, we’re not out of the woods yet. The loss of the monthly discount from April is still going to hit hard as we’ll need to find an extra £67 each month from somewhere.”

Coles highlighted how nearly half (48%) of people are finding it difficult to pay their energy bills, with that figure rising to 54% for those in their 30s and 40s.

The government had come under increasing pressure in recent weeks to cancel the rise to the EPG, which was set to rise to £3,000 from 1 April.

As wholesale energy prices have dropped, it has become increasingly affordable for the government to continue protecting customers with the same deal they are on now.

Energy prices are now 50% lower than forecast in October and are projected to continue dropping.

Without the government’s help, the average household would have been paying an annualised bill of almost £4,300 between January and April. But the support reduced that to £2,500.

This means that the government has been paying around £1,800 toward each household’s energy bills.

The chancellor said the extension of the EPG will “ease the pressure on families, while also helping to lower inflation too”