End of £400 universal winter Government energy support

The £400 universal Government support paid to households over the winter ended on 1 July 2023, the same date the energy price cap set by Ofgem for England, Wales and Scotland took effect¹. The cap replaced the Energy Price Guarantee, which had limited the typical bill to £2,500 since October¹.

Under the cap, annual household energy bills fall to £2,074 a year from July, a drop of £426¹. Fair By Design, an independent organisation, said the fall "coincides with an end to the £400 universal Government support provided over the winter, meaning that in practice many will not notice the difference"¹.

The organisation also reported that the cap announcement was made by Ofgem for England, Wales and Scotland¹. It said the cap replaces the Government's price guarantee, which had limited the typical bill to £2,500 since October¹.

Separately, Fair By Design reported on the premium paid by households that do not pay by direct debit. It said participants in its focus groups were "visibly shocked that the premium for paying on receipt of bill is over £200 per year", and that 75% of those paying when they receive the bill had no idea they paid extra for this, according to research conducted by Octopus earlier in 2023¹. It said that after the price cap took effect, the standard credit premium would be £135 per year¹. Ofgem is looking at whether to continue its current "cost-reflective approach" to payment method cost differentials¹.

Fair By Design said it is calling for a simpler and more transparent system of tariffs, where no one pays more simply due to the way they pay¹.

Why it matters for households

The £400 support was universal, so its withdrawal affects households across the UK that received it over the winter¹. For many, the reduction in the typical annual bill under the cap is offset by the loss of that payment, which is why Fair By Design said many will not notice the difference in practice¹.

The figures apply to a typical household, not to every bill: the cap limits what suppliers can charge for unit rates and standing charges, so what an individual household pays depends on how much energy it uses¹. The cap covers England, Wales and Scotland¹.

Households that pay when they receive the bill rather than by direct debit face a premium for doing so. Fair By Design reported that the premium was over £200 per year at the time of its focus groups, and that it would be £135 per year after the price cap took effect¹. It also reported that 75% of those paying on receipt of bill did not know they paid extra, according to Octopus research¹.

What happens next

Ofgem is looking at whether to continue its current "cost-reflective approach" to payment method cost differentials¹. No outcome or date for that review is given in the source. No further Government support payment for the winter has been reported in the source.