The Energy Price Guarantee (EPG) expires at the end of March 2024, Ofgem said in its default tariff cap update published on 23 February 2024, setting out cap levels for the three months from 1 April to 30 June 20241. The regulator said the new levelisation policy "replaces current support through the Energy Price Guarantee, but this support is due to expire at the end of March 2024"1. The Commons Library records that "The EPG ended on 31 March 2024"2.
Under the Energy Price Guarantee, introduced in October 2022 to limit price rises for domestic customers, the EPG was no longer needed to set maximum prices once the cap fell below its level, and it ended in March 20242. Ofgem's figures for the coming cap period, after levelisation, are:
| Payment method | Jan to Mar 2024 | Apr to Jun 2024 | Change |
|---|---|---|---|
| Direct Debit | £1,928 | £1,690 | -£238 |
| Standard Credit | £2,058 | £1,796 | -£261 |
| Prepayment (PPM) | £1,960 | £1,643 | -£317 |
| Economy 7 (Direct Debit) | £1,272 | £1,125 | -£147 |
The Direct Debit cap falls by £238, or 12%, for a typical customer1. The prepayment cap falls by £317, or 16%, and sits £47 below the Direct Debit level, mainly because levelisation cuts prepayment bills by £49 and equalises standing charges with Direct Debit1. Standard credit customers pay an additional £106 compared with Direct Debit1. Ofgem states that Direct Debit customers will typically pay £10 more per year under levelisation, while prepayment customers pay £49 less, or £52 less including VAT1.
Ofgem attributes the change mainly to wholesale costs, where the allowance fell from £985 to £720, citing stable winter gas supplies, high European storage levels and the return of France's nuclear fleet1. The adjustment allowance rose by £17, including £28 for additional debt-related costs, while the £11 COVID-related allowance falls away from 1 April 20241. Policy costs rose from £157 to £188, driven by the Renewables Obligation and the Great British Insulation Scheme1. Network costs fell from £381 to £3681.
"This policy replaces current support through the Energy Price Guarantee, but this support is due to expire at the end of March 2024"
Why it matters for households
The EPG was a government-funded ceiling that held typical bills below what the price cap would otherwise have set. Its expiry means the cap alone sets maximum unit rates and standing charges, so household bills now track wholesale and policy costs directly rather than being cushioned by subsidy. The levelisation allowance redistributes costs between payment methods: prepayment households, who often have less choice over how they pay, see the largest reduction, while Direct Debit households see a small increase. Standing charges remain a fixed daily cost regardless of how much energy a home uses, and Ofgem notes that electricity distribution pressures raised the electricity standing charge by £17 per year even as network costs overall fell1. For a household's energy independence, the practical position is that the support mechanism that shielded bills during the crisis has closed, and the cap is again the only limit on standard variable tariffs. Ofgem said it expects suppliers to comply with their obligations and will monitor compliance1.
What happens next
The new cap levels run from 1 April to 30 June 20241. Ofgem is obliged to update the cap at intervals by applying updated inputs to its formulae, and said it was not making a policy decision in doing so1.
Sources2 cited
- Default Tariff Cap update, ofgem.gov.uk
- Author: BOLTON, Paul, researchbriefings.files.parliament.uk