Please note that energy prices are changing on a daily basis. We will update the information on this page when the government alters the energy price cap.
The energy industry has been volatile over the past year - supplies have run low, prices have soared, and energy companies have gone bust. But what's in store for 2023?
Brits will need to brace themselves for another spike in energy prices from April 2023, though the exact size of the increase is still uncertain. Thankfully, energy bills should start to fall again in July, but experts have suggested prices probably won't return to pre-pandemic levels.
Want a better idea of how much you can expect to pay for energy in 2023? We'll take you through everything you need to know in this article, including information on price predictions, details on support from the government, and tips on how to reduce your bills.
Will your energy bills increase in April 2023?
UK households will see their energy bills increase again in April 2023 - though, not by as much as experts initially thought.
The government's Energy Price Guarantee (EPG) will cap the typical household on a dual tariff at £3,000 per year - up from £2,500 a year. That's a 20% increase on the current EPG cap, after a 27% increase in October 2022. However, since the government will also be removing the £400 Energy Bills Support Scheme grant in April, bills will actually increase by 43%.
But this figure is only relevant to a 'typical' household on a dual tariff. You can see how much the estimated figures fluctuate depending on the type of household in the table below.
However, it's also important to bear in mind that the government will be altering the Energy Bills Support Scheme so that it only supports vulnerable and low-income groups, rather than every household in the UK.
This means UK households will actually experience a 43% increase in energy bills in April 2023, going from paying £2,100 per year (which includes the Energy Support Scheme grant) to £3,000 per year.
Based on this 43% increase, that means the unit cost of energy in the UK will increase to about 40.8p per kilowatt-hour (kWh) for electricity, and 12.1p per kWh for gas.
There is no price cap on non-domestic energy, which means businesses are going to experience another spike in energy bills. Thankfully, the government has recently laid out plans on how to support businesses through this challenging time - but more on that later.
Can you get help with your energy bills?
Instead of supporting everyone with their energy bills, the government has said it's designing a "new, more targeted approach, which costs the taxpayer less".
Under these new plans, vulnerable and low-income groups will receive the following payments to help with energy costs from April 2023:
- Low-income households - Households on means-tested benefits will receive £900 in total, spread across three instalments in spring 2023, autumn 2023, and spring 2024
- Pensioner households - Pensioners will receive £300 in winter 2023
- Disabled households - People on certain disability benefits will receive £150 in summer 2023
The government has said it will publish more information about the timings of these payments in the near future.
Over eight million households in the UK on means-tested benefits will be eligible for the £900 cost of living payment in 2023/2024. But to receive the grant, you'll need to receive one of the following benefits:
- Child tax credit
- Income-based jobseeker's allowance
- Income-related employment and support allowance
- Income support
- Universal credit
- Working tax credit
- Pension credit
Support for businesses
UK businesses are struggling. Unlike the domestic energy scene, there is no price cap on companies' energy bills, leaving many spending thousands of pounds on electricity and gas each month.
Thankfully, to prop up the economy during the energy crisis, the government is setting up a new Energy Bills Discount Scheme (EBDS) for businesses, charities, and the public sector. The new scheme will mean all eligible UK businesses and other non-domestic energy users will receive a discount on energy bills.
From April 2023 to March 2024, eligible non-domestic customers will receive a discount on their bills of up to £6.97 per megawatt-hour (MWh) on their gas bill and up to £19.61 per MWh on their electricity bill. These discounts will be automatically applied to eligible businesses' energy bills.
Summary
The prospect of energy prices going up again will understandably feel very daunting to a lot of people. Not only will this situation be tough for homeowners around the UK, but businesses will also suffer - having a knock-on effect on the rest of the economy.
Thankfully, we're starting to see a glimpse of the light at the end of the tunnel, as experts predict prices could start falling again soon. In the meantime, the government will have to support as many people as it can, until energy prices become more stable.