Revised Energy Price Guarantee set at £3,000 from April 2023

The Energy Price Guarantee (EPG) introduced on 1 October 2022 will expire in April 2023 and be replaced by a revised guarantee running until April 2024, set at a higher level of £3,000 for the average household, Consumer Scotland has reported¹. The November 2022 Autumn Statement confirmed the revised level, compared with £2,500 under the current scheme¹.

Consumer Scotland, the statutory body for consumers in Scotland, set out the change in its Energy Affordability Tracker published on 14 November 2022¹. The tracker covers the period spanning the end of the previous energy price cap and the introduction of the EPG on 1 October 2022¹.

Alongside the revised guarantee, additional cost of living payments will be introduced in 2023, including £900 to households on means-tested benefits, £300 to pensioner households and £150 for individuals on disability benefits¹. Consumer Scotland said support under the revised arrangements would be "more narrowly targeted to fewer households"¹.

The tracker also reported how households in Scotland were managing financially in autumn 2022. Most people in Scotland (61%) reported they were managing well financially, with only 8% saying they were managing very well, while over a third (36%) said their household was not currently managing well financially and one in ten (11%) said they were not managing financially at all¹. Women were slightly more likely (39%) than men (34%) to say they were not managing well, younger people aged 16 to 24 were more likely (44%) than those aged 55 and over (24%), and those in the C2DE occupational classification were more likely (46%) than those in the ABC1 category (25%)¹. People in urban areas were more likely (38%) than those in rural areas (30%) to report not managing well, and consumers using electricity as their main source of heating were more likely (46%) to report this than people on the mains gas grid (35%) or using non-regulated fuel types (30%)¹.

A previous wave was carried out in spring 2022 by the Energy Consumers Commission, a predecessor body to Consumer Scotland, with a sample of 2,012 adults¹. Consumer Scotland noted that seasonality differences and the changeable nature of energy crisis support between the two waves may have affected the results¹.

Why it matters for households

The Energy Price Guarantee limited the unit cost of energy for households from 1 October 2022, and the revised level of £3,000 for the average household applies from April 2023 until April 2024¹. That is £500 higher than the £2,500 level in place at the time of the tracker, so the average household would face a higher capped cost under the revised scheme¹. The separate energy price cap set by Ofgem continues to govern the underlying rates the guarantee discounts¹.

The 2023 cost of living payments are targeted at specific groups: households on means-tested benefits, pensioner households and individuals on disability benefits¹. Consumer Scotland said support under the revised guarantee would be more narrowly targeted to fewer households than the current scheme¹.

The tracker also identified groups reporting greater difficulty managing financially, including prepayment meter customers, who Consumer Scotland said may pay £150 per month more than a typical direct debit customer over the same period because direct debit payments are smoothed across the year¹. Households needing an enhanced heating regime, such as people with disabilities or medical conditions, may also face higher than typical energy demand¹.

What happens next

The EPG expires in April 2023 and the revised guarantee runs until April 2024¹. The additional cost of living payments are due to be introduced in 2023¹. Consumer Scotland said successive waves of its Energy Affordability Tracker would help identify issues and trends to improve the provision of support and advice for energy consumers¹.