The Energy Price Guarantee (EPG) was increased to £3,000 for typical annual household consumption from April 2023 and extended to run to the end of March 2024, under measures announced in the Autumn Statement 20221. The then Chancellor Jeremy Hunt had said on 17 October 2022 that the EPG would last only six months, before setting out the longer and less generous version in the Autumn Statement1.
The EPG had been announced on 8 September 2022 by the then Prime Minister Liz Truss, and introduced from 1 October 2022, capping typical consumption at £2,500 a year1. It replaced a price cap level that Ofgem had announced at the end of August 2022, when the cap was due to rise by a further 80% to £3,549 from 1 October 20221. The guarantee limited the increase in typical bills to 27% in October 20221.
"In the Autumn Statement 2022 he announced that the EPG would be increased in April 2023 to £3,000 for typical annual consumption and last to the end of March 2024"
The higher £3,000 level did not in practice set the maximum prices households paid. The EPG became less generous in July 2023 when it rose to £3,000 a year, but a fall in the price cap in the same month meant the EPG no longer set maximum prices and consumer bills fell1. The price cap for July to September 2023 fell to £2,074, and at the end of August 2023 Ofgem announced the cap for October to December 2023 would fall further to £1,9231. There were further falls of 12% in April 2024 and 7% in July 20241.
| Date | EPG level for typical annual consumption | Status |
|---|---|---|
| 1 October 2022 | £2,500 | Introduced, replacing a cap due to rise to £3,549 |
| April 2023 | £3,000 | Increased under Autumn Statement 2022 |
| End of March 2024 | Scheme ended | Ran to this date |
The wider backdrop was a period of high inflation. The annual rate peaked at 11.1% in October 2022, a 41-year high, before easing to 2.0% in May 2024, the Bank of England's target for the first time since July 20211. Over the three years between May 2021 and May 2024, UK consumer prices rose by 20.8% in total1. Food prices rose by 30.6% over the same three years, having previously taken over 13 years, from January 2008 to May 2021, to rise by the same amount1.
Why it matters for households
The EPG was a cap on the unit cost of gas and electricity for households, not a cap on the total bill, so a household using more than typical amounts paid more than the headline figure1. The £3,000 level set in the Autumn Statement therefore described typical consumption, and the amount a given home paid depended on its own usage.
For a household's energy independence, the scheme's design mattered in two ways. It held down the price per unit of gas and electricity for a defined period, which limited how far bills could rise with wholesale costs, but it did not change how much energy a home needed or where that energy came from. The guarantee also became less relevant once the price cap fell below it, because from July 2023 the cap rather than the EPG set maximum prices1. The Energy Price Guarantee is now a closed scheme, and the price cap is the mechanism that sets default tariff levels.
The period also coincided with a squeeze on household budgets beyond energy. Interest rates were raised at 14 consecutive policy meetings from 0.1% in December 2021 to 5.25% in August 2023, and left unchanged at 5.25% at meetings up to June 20241. Rental price growth reached a high of 9.2% for the year ending March 20241. Low income households experienced a higher than average inflation rate, because they are more affected by high food and energy prices1.
What happens next
The EPG ran to the end of March 20241. The briefing states that the government is providing less support for the cost of living in 2024/25 compared with the previous two financial years1. No further extension of the EPG has been reported.
Sources1 cited
- [](https://researchbriefings.files.parliament.uk/documents/CBP-9428/CBP-9428.pdf), researchbriefings.files.parliament.uk