Government announces new energy support, called the Energy Price Guarantee.

PM announces a new energy bills scheme that will reduce the impact of the planned October price cap rise.

The government has announced (8 Sept) changes to how energy bills will be charged to help reduce the impact of the proposed October price cap. The new Prime Minister, Liz Truss, has said that average bills will be held at £2,500, under a scheme called the Energy Price Guarantee (EPG), for the next two years. This means that the October price cap, announced by Ofgem (26 August) will no longer be implemented in full for customers.

Energy Price Guarantee.

To limit the amount customers' bills go up by, the government will compensate energy firms for the difference between the wholesale price for gas and electricity they pay and the amount they can charge customers. From 1 October the government will supplement what customers pay for energy which means that instead of the typical household dual-fuel bill rising to £3,549, a typical household will now see an annual bill of £2,500. The government says that it will pay for the subsidy, which means that customers will not be expected to repay the support.

​​​​​​​You will still pay for the gas and electricity you use. But the government's Energy Price Guarantee will limit the price that we can charge for each unit of energy. However, if you use more gas or electricity, you will pay more. The scheme does not cap your bill at £2,500, your bill amount is still based on how much energy you use. We’re working with the government and Ofgem to find out how these changes will affect our customers and will be in direct contact with how the EPG affects them shortly. Visit our dedicated Energy Price Guarantee page for full information on how the EPG affects customers.

The Energy Price Guarantee replaces Ofgem's regular price caps. The information below is for reference to how the old price cap worked. From October 1 2022 the government's new Energy Price Guarantee starts.

Ofgem's price cap.

Ofgem announced on 1 October 2022, that the price cap for customers on a standard variable tariff would increase to £3,549 if they pay by Direct Debit and to £3,764 if they pay any other way. For customers with a prepayment meter, the price cap would increase to £3,608. This will no longer be passed on in full to customers following the new support from the government announced by the Prime Minister Liz Truss (8 Sept).

The price cap affects customers on a standard variable tariff. The price cap does not apply to you until the end of your contract if you’re on a fixed energy tariff. Find out which tariff you’re on by logging into your account.

In August 2022, Ofgem announced that the review period for the price cap will be reduced from six months to every three months (quarterly). This means that the next price cap change, after 1 October, will be on 1 January 2023. This review period has now been frozen by the government with the announcement of the Energy Price Guarantee scheme that will run for two years.

In a statement Ofgem said “The energy market remains incredibly volatile and there are a number of huge geopolitical issues continuing to apply massive pressure. Ofgem is working to ensure suppliers shore up their positions so they can weather the ongoing storm.”

What is the price cap?

The price cap was introduced by the government in 2019 as backstop protection for customers who are on an energy tariff with standard variable rates. Electricity and gas prices are reviewed and updated by the energy regulator Ofgem.

The price cap is calculated and set by Ofgem to reflect changes in industry costs. The price cap level is set for customers in England, Wales and Scotland. Retail energy prices in Northern Ireland are not subject to a cap. The price cap has now been replaced by the Energy Price Guarantee.

How will the Energy Bills Support Scheme work?

In May 2022 the government announced several support measures to help households with rising energy bills. The main measure, announced by the Chancellor, is £400 off electricity bills for domestic customers across England, Wales and Scotland. Known as the Energy Bills Support Scheme (EBSS) this money will start to be credited to customers accounts from 1 October 2022. This money does not need to be paid back. There’s more information on our dedicated Energy Bills Support Scheme webpage.

Each energy supplier has been asked to pay customers who have an electricity supply, so this means if your electricity is with us, you'll get your payment from E.ON Next. If you only have your gas with us, then you'll get your rebate through your electricity supplier.

You'll see a discount of £66 applied to your energy bills in October and November, and £67 a month from December to March 2023.

We'll be paying the money differently, depending on how you pay for your fuel now:

  • Fixed Direct Debit customers will receive the money automatically as a deduction to their monthly Direct Debit.

  • Pay on receipt of bill customers and regular cash payment customers will see the money automatically applied as a credit to their energy accounts in the first week of each month. This will show as a credit in the payments section of their monthly bill.

  • Smart prepayment customers will see the money credited directly to their meters as a top up in the first week of each month.

  • Traditional prepayment customers will be provided with vouchers in the first week of each month. You'll need to redeem these at your usual top-up point in a similar way to the Warm Home Discount.

The government has published more information about the Energy Bills Support Scheme on their website.

What other measures are there? 

  • A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.

  • A £650 payment will be made to more than eight million low-income households who receive Universal Credit, tax credits, pension credit and other means-tested benefits. The first payment of £326 will start appearing in people's bank accounts from 14 July. To be eligible for the first instalment, people must have started a successful benefits claim by 25 May.

  • £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax Rebate. Further details to be announced. 

  • The government is continuing with plans to expand eligibility for the Warm Home Discount and increase the rebate value to £150 each year (from £140). More detail will be published shortly in the government response to the consultation on this.

  • The Winter Fuel Payment provides between £250 and £600 help to pay heating bills for customers born before 25 September 1956.

Why are energy prices rising?

Like all energy suppliers, we buy energy from the wholesale energy market to then distribute to you, our customers. Even renewable energy needs to be bought in this way. 

The cost of energy in the market has increased significantly in recent times to an unprecedented high. Since this cost makes up a large proportion of your bill, we need to increase the prices on our price plans too.

Am I affected by the price cap?

The price cap has now been replaced by the Energy Price Guarantee. The below information refers to the original price cap set by Ofgem. Please go to our Energy Price Guarantee page for more information.

The price cap applies to you if you're on one of our standard variable tariffs, like our Next Flex or E.ON EnergyPlan. We'll contact customers on these tariffs to let them know what this means for them.

If you were previously with another supplier and were migrated over to E.ON Next, and you have not chosen a fixed tariff, you may be on our standard variable tariff. 

The new cap level does not apply to you right now if you are on a fixed-term tariff.

If you're on a fixed-term energy tariff, your prices will stay the same until your tariff-term ends. We’ll contact you when your fixed-term tariff is about to end with guidance for what to do.

You can check which tariff you're on by logging in to your account and visiting your dashboard.

What support is available for E.ON Next customers?

This is a worrying time for everyone as the cost of energy continues to go up. We understand that you may be struggling to pay and have a number of resources to help. 

How can I get help from you with making this decision?

We recommend checking your tariff online at the end of the month once any new prices have been set and waiting to contact us until then.

You can get advice from our Energy Specialists on social media at Facebook, Twitter and WhatsApp. Our E.ON Next Community is also a great place to find support from other E.ON Next customers. 

Flash with magnifying glass.

More of your price cap FAQ.

You’ll find more answers in our FAQ below which our Energy Specialists regularly update to help support our customers. You can also stay up to date by following us on Facebook and Twitter.