The energy price cap for a typical dual fuel household paying by direct debit fell to £3,280 on 1 April 2023, a reduction of almost £1,000 from the £4,279 level that applied from 1 January to 31 March 20231. The government attributed the fall to recent declines in wholesale energy prices1.
The cap does not set a household's bill. It limits the standing charge and unit rates a supplier can charge on a default tariff, so what a home pays depends on how much energy it uses. The £3,280 figure is based on typical consumption for a dual fuel household paying by direct debit1. Rates differ by payment method, and the price cap rates by payment method page sets out how direct debit, prepayment and standard credit compare.
The cap level sat above what most households actually paid over the same period, because the Energy Price Guarantee (EPG) continued to limit bills. The government said the EPG would bring a typical household's energy bills down to around £2,500 per year until the end of June 20231. The Spring Budget extended the EPG at the same level for an additional three months, from April to the end of June 20231. The Energy Price Guarantee page explains how that scheme worked while it was open.
"From 1 April the energy price cap is £3,280 for a dual fuel household paying by direct debit based on typical consumption, a reduction of almost £1,000 from the current level, reflecting recent falls in wholesale energy prices."
The same document set out a separate insulation scheme running from 2023 to 2026, renamed the Great British Insulation Scheme and previously consulted on as ECO+1. It applies in England, Scotland and Wales1. Eligibility for its general group is set by Council Tax band and EPC rating:
| Nation | Council Tax bands (general group) |
|---|---|
| England | A to D |
| Scotland | A to E |
| Wales | A to E |
The government said it expanded eligibility in Wales from bands A to C, as consulted on, to bands A to E, to better align the proportion of eligible homes in each nation1. Homes in the general group must also have an EPC rating of D to G1. The document estimates the scheme will make around 300,000 homes more energy efficient, with those receiving insulation upgrades seeing bills fall by around £300 to £400 a year on average1. A minimum of 20% of support is to go to low-income and vulnerable households1.
Why it matters for households
A lower cap level means the maximum a supplier can charge on a default tariff fell, but it did not by itself cut what a household paid while the EPG was in place, because the guarantee set the effective limit on a typical bill at around £2,500 until the end of June 20231. For a home's energy independence, the cap changes the price of each unit of gas and electricity bought, while insulation and other efficiency measures change how many units are needed. The government's own estimate for the insulation scheme is a £300 to £400 annual reduction for homes that receive upgrades1, a saving that persists as prices move, unlike a cap level that is reset periodically. The price cap history page records every level and when the next is announced, and what makes up an energy bill breaks the standing charge and unit rate components down.
What happens next
The government said it planned to launch a self-referral service in summer 2023 as part of GOV.UK, covering the insulation scheme and other complementary energy schemes1. It said it would lay affirmative regulations in Parliament, expected to come into force later this year1. Suppliers were permitted to begin delivering measures ahead of the legislation coming into force, from the date the response document was published, but the government said it would not allow acceptance of measures delivered ahead of publication of that response1.
Sources1 cited
- Great British Insulation Scheme (2023-2026) and Amendments to ECO4 regulations: government response, assets.publishing.service.gov.uk