The Energy Price Guarantee: the 2022 to 2023 bill support scheme

The Energy Price Guarantee (EPG) was the government scheme that capped gas and electricity prices for households during the energy crisis. It came into force on 1 October 2022 and ended in March 2024¹. It is no longer in place: since it ended, bills on standard variable tariffs have been limited by the Ofgem price cap instead.

The guarantee worked by setting maximum prices for gas and electricity that were below the levels the existing price cap would have allowed, with the government compensating suppliers for selling at those lower prices¹. At its first level it was equal to an annual bill of £2,500 for a typical household; from July 2023 it was equal to £3,000². Nobody had to apply: the lower prices were applied automatically to bills and meter rates.

What the Energy Price Guarantee was and how it worked

The Energy Price Guarantee was a temporary discount on electricity and gas prices for all households, running from October 2022 to March 2024, UK wide including Scotland⁴. It was announced at a moment when wholesale gas and electricity prices had driven the Ofgem price cap to levels that would have added hundreds of pounds to typical bills, and the guarantee was designed to hold prices below that.

The mechanism was straightforward. The government set maximum prices for gas and electricity which were below those under the existing price cap, and compensated energy suppliers for selling at below-cap prices to domestic customers on standard variable tariffs¹. In effect, the UK Government funded the difference between the maximum price consumers were charged and the Energy Price Cap⁵. One way of describing the arrangement, used by the Scottish Government in its cost of living statistics, was that the price cap for the average dual fuel customer paying by direct debit was frozen at £2,500 under the guarantee⁶.

Because the discount was built into the prices suppliers were allowed to charge, there was nothing for a household to do. No application, no claim and no eligibility test applied to the guarantee itself: the reduced unit rates appeared on bills and, for prepayment customers, at the meter. Related schemes worked the same way, with rebates credited automatically against future electricity use for prepayment customers⁷.

Guarantee levels: £2,500, then £3,000 for a typical household

The guarantee started at a level equivalent to an annual bill of £2,500 for a typical household, and this ran from October 2022 to June 2023². The Resolution Foundation noted at the time that this "supported price" roughly equated to a price cap level of £2,500⁸. In the November 2022 Autumn Statement the government confirmed a revised, higher level: the guarantee would be set at £3,000 for the average household from April 2023⁹, and in the event the £3,000 level applied from July 2023 to March 2024². The House of Commons Library describes the change as capping typical household energy bills at £3,000, rather than £2,500¹⁰.

The £2,500 and £3,000 figures were never a cap on what any individual household paid. They were what a household with typical energy use would pay over a year at the guaranteed unit rates. Actual bills varied with how much energy each home used, the payment method, the region and the meter type. The peak level of the typical annual bill under the guarantee, from October 2022 to June 2023, was £2,106¹, a figure that reflects the typical-use definition rather than a maximum anyone could be charged.

The guarantee limited unit prices, not your total bill

The single most common misunderstanding about the guarantee, and about the price cap that replaced it, is that it capped the total bill. It did not. The guarantee was effectively a cap on the price charged for each unit of energy, rather than a cap on your total bill³. A household that used a lot of gas and electricity paid more than £2,500 even at the guarantee's first level; a household that used little paid less.

Under the guarantee, average unit prices were 10.3p per kWh for gas and 34p per kWh for electricity for those on standard tariffs¹¹. Your bill was then built from three parts: the units of gas you used, the units of electricity you used, and the daily standing charge for each fuel. The amount you were charged was set by the amount of energy you used, the unit cost and the daily fee¹².

The same principle applies to the price cap today, and it is why payment method and meter type still matter to what a household pays. Research on the poverty premium in Britain found that households paying by prepayment meter paid around £75 more a year for electricity and £56 more for gas than those on the cheapest arrangements, while those paying on receipt of bill on a cheaper fixed rate tariff paid only £30 more than the baseline¹³. A cap on unit prices narrows the gap between tariffs but does not remove it.

Unit prices and standing charges under the guarantee

The guarantee cut the price of each unit of energy but left standing charges alone. Standing charges, the fixed daily fee for being connected, were not affected by the guarantee¹¹. That meant a household with low usage saw a smaller proportional benefit than a heavy user, because the unchanged daily fee made up a larger share of its bill.

Standing charges have remained a live issue since. For energy customers paying by direct debit on an average price-capped tariff, standing charges were 53.68p per day for electricity and 34.03p per day for gas¹⁴. The Ofgem price cap sets the maximum unit price per kWh and the maximum daily standing charge energy suppliers can charge¹⁵, and the actual levels vary by energy supply region, payment method and type of electric meter, for example standard or Economy 7¹⁵. Some suppliers offer tariffs with no standing charge, but these come with a trade-off: with a zero standing charge tariff you pay a much higher unit rate for the first 2kWh of gas or electricity you use each day¹⁴.

For comparison with the guarantee period, when the Ofgem cap for July to September 2023 came in below the guarantee level, unit prices were 27% lower than under the guarantee for gas and 9% lower for electricity¹. Standing charges, which the guarantee had not touched, continued to be set by the cap throughout.

Fixed deals, prepayment meters and tenants: who got the discount

The guarantee reached beyond customers on standard variable tariffs. Customers on fixed-rate deals were eligible for a discount of up to 17p per kWh for electricity and up to 4.2p per kWh for gas¹¹. Fixed tariffs fix the amount you pay for each unit of gas and electricity you use, and your daily standing charge³, and a supplier on a fixed-rate tariff cannot increase your prices for the time they are fixed, unless the government raises VAT¹⁶. Existing fixed deals also had their rates cut on 1 April, thanks to some government scheme costs being removed from bills³.

Prepayment customers were covered too. The legislation underpinning the rebate schemes provided for a customer who pre-pays for electricity to be given credit to the amount of the prescribed rebate against the cost, including VAT, of future electricity use⁷. Under the current cap arrangements, households with a pre-payment meter receive a standing charge discount so they do not pay more than direct debit customers¹⁷, although as noted above the poverty premium research found prepayment households still paid more overall¹³.

If your landlord paid the energy bill, the guarantee still reached you indirectly. It put a limit on the rate your supplier could charge your landlord for gas and electricity¹². If your landlord got a discount on your energy bill they should automatically pass this support onto you, known as a pass-through requirement, and they had six months to do so¹². If your home was on a heat network and your landlord was your heat supplier, they should have passed on a fair amount of any discount they received¹². Landlords with a business energy supply, for example if you live in a park home or rent a business space, might have saved money under the Energy Bill Discount Scheme instead¹². Separately, a landlord might charge you more for your energy if they borrowed money under a Green Deal to make energy efficiency improvements to the property¹².

How the guarantee sat alongside the Ofgem price cap

The guarantee and the price cap were two different limits on the same prices, and households paid whichever was lower. The price cap, introduced by Ofgem in 2019, was initially designed as a safeguard against the loyalty penalty, and later acted as a vital price protection mechanism during the period of unprecedented price rises in the wholesale market¹⁸. During the guarantee period the cap was still calculated each quarter, but the guarantee's maximum prices sat below it, so the guarantee was what households on standard tariffs actually paid¹.

From 1 July 2023 the position reversed for most tariffs: the guarantee no longer applied to most tariffs because the cap had fallen below the guarantee level¹². When the cap for July to September 2023 came in, its unit prices were 27% lower than under the guarantee for gas and 9% lower for electricity¹, so most customers simply moved onto cap prices. The guarantee remained in the background until March 2024 as a ceiling in case wholesale prices rose again.

The guarantee also had a wider economic footprint. The VAT relief statistics note that the increase in VAT on domestic fuel and power in 2022 to 2023 reflects the increase in the Ofgem Default Tariff Cap and the government's Energy Price Guarantee introduced from 1 October 2022²⁰.

Did it cover Scotland, Wales and Northern Ireland?

The guarantee applied UK wide, including Scotland, as a temporary discount on electricity and gas prices for all households from October 2022 to March 2024⁴. Wales was covered on the same basis, and in 2022 the government also provided every household in the country with a £400 energy grant alongside Council Tax support²¹.

Northern Ireland was different, because its energy market is separate. Energy prices in Northern Ireland are not controlled by the price cap¹, so a distinct arrangement, the Household Electricity Discount Scheme, delivered support the government described as comparable to support being delivered in Britain²². Pre-pay and keypad customers there received the discount automatically at their meter when they topped up²².

Some later support schemes continue to differ between the nations. The Warm Home Discount Scheme is not available in Northern Ireland, and the scheme in Scotland works slightly differently to the scheme in England and Wales²³. Winter heating assistance is a devolved matter in Scotland, while Winter Fuel Payments are a reserved benefit in England and Wales²⁴. Scotland's Winter Heating Payment needs no application: if you are eligible it is paid automatically²⁵.

What the guarantee cost

The Scottish Government's analysis of the cost of living crisis put the estimated cost of the Energy Price Guarantee at £25 billion². The cost was highly sensitive to the level at which the guarantee was set: when the government moved from the £2,500 level to £3,000 from April 2023, the Resolution Foundation estimated the change could save the Treasury up to £40 billion in the following year⁸.

The reason the cost fell is the same reason most households stopped noticing the guarantee in its second year. Once the Ofgem cap dropped below the guarantee level from July 2023, the government was no longer funding a gap for most tariffs, because households were paying the lower cap prices anyway¹. The guarantee's later months cost relatively little because it had become a backstop rather than an active subsidy.

How the Ofgem price cap works for bills now

Since the guarantee ended, the Ofgem price cap is the limit that matters for households on standard variable tariffs. The cap only affects standard variable tariffs, also known as standard, default or out-of-contract tariffs¹⁹, and it protects customers on their provider's standard variable tariff by capping the price per unit of energy¹⁶. It is reviewed every three months¹⁹, and it sets the maximum unit price per kWh and the maximum daily standing charge energy suppliers can charge¹⁵. The actual figures vary by energy supply region, payment method and meter type¹⁵.

The cap level has moved a great deal since the guarantee ended. It was £1,690 per year for a typical-use household in April 2024, rising to £1,849 in April 2025²⁶, a level 62% higher than the £1,138 between April and June 2021²⁶. It then fell over the following 12 months, from £1,849 in April 2025 to £1,641 in April 2026²⁷. Other official figures trace the path since: £1,755 for the final quarter of 2025²⁸, a slight increase of 0.2% to £1,758 per year in January 2026 for a typical household using electricity and gas and paying by direct debit²⁹, and an Ofgem estimate for July 2026 of an annual bill of £1,862 for an average household paying by direct debit for dual fuel, a rise of £221³⁰. The Office for National Statistics notes that a decrease in energy prices from April 2026 was because of a reduction in Ofgem's energy price cap³¹. For context, when the cap first fell below the guarantee in October 2023, typical household bills were around £160 per month, with an electricity unit rate of around 28p per kWh and gas at around 7p per kWh³².

If you are on a fixed-term tariff, the cap does not limit your rate, but your supplier cannot raise your prices while the tariff is fixed, and it must contact you 42 to 49 days before the end date to tell you the tariff is ending and that you can switch without a fee¹⁶. Two longer-term proposals have been put forward to replace crisis-era support: the Joseph Rowntree Foundation has proposed an Affordable Energy Guarantee, including an allowance reducing the unit price of the first 26 and 111 kWh of electricity and gas by around 20% respectively³³, and the disability equality charity Scope has proposed extending the Energy Price Guarantee for disabled households beyond March 2024, until a social tariff is introduced³⁴. Scope noted the energy price cap for January to March 2024 was £1,928 for a typical household³⁴.

Where to get help with energy bills

If energy bills are unaffordable now, several routes of free help exist. If your heating bills are very high, you can call 0800 098 7950 or see GOV.UK's Find ways to save energy in your home website³⁵. If you cannot afford to top up your prepayment meter, contact your energy supplier to check whether they have grants available³⁶. Some energy companies have set up trust funds that may be able to help you pay your energy bills if you are in financial difficulties, and you may be able to get a grant or loan for insulation, draught proofing, central heating and other energy-saving measures under the Affordable Warmth Obligation³⁷.

Targeted schemes continue alongside these. The Warm Home Discount is a one-off discount on your energy bill, taken off automatically by your energy supplier²⁵; eligibility is generally linked to Pension Credit guarantee or another low income benefit, your supplier must be part of the scheme, and the bill must be in your name or your partner's name³⁸. Park home residents can apply for a one-off payment of £150 towards their energy bills³⁹. Fuel vouchers are available through schemes such as Better Housing Better Health, run by the National Energy Foundation, which can assess eligibility and take referrals²³.

If you have a problem with your bill or tariff, your energy supplier is required to contact you before your fixed-term tariff ends, and complaints about bills can be escalated through the supplier's complaints process and then to the Energy Ombudsman¹⁶. For wider help with debt and household costs, the debt section of this site sets out the free options, and the cost of living crisis page explains how energy prices drove the wider rise in living costs.