Energy Costs

The Energy Price Cap Explained: What it actually means.

In light of the recent increase in the cost of wholesale gas, the price suppliers need to charge per unit of energy has gone up significantly.

To help protect consumers, the Government has announced the Energy Price Guarantee (EPG) which comes into effect on 1 October 2022.

This new scheme will reduce the unit cost of electricity and gas so that a household with typical energy use in Great Britain pays, on average, around £2,500 a year on their energy bill, for the next 6 months. 

This is only an illustration for typical average use and each household will be charged by their supplier(s) for the energy they actually use, which could be more than £2,500.


So, what does this actually mean?

On average usage a household will save £1,000 a year (based on current prices from October). Energy suppliers will be fully compensated by the government for the savings delivered to households. The average is based on a 2-3 bedroom property using 12,000 kilowatt hours (kWh) of gas and 2,900 kWh of electricity per annum.

For an individual customer, the amount paid under the EPG will vary depending on how much energy they use, where they live, how they pay for their energy and their metering arrangement. The £2,500 figure is based on a household with typical consumption on a dual electricity and gas bill paying by direct debit – it is not a maximum charge.


What if you don’t pay dual fuel direct debit?

·       If you currently have a variable tariff, you can expect your bills to increase by around 27% in October. That's because while the EPG is lower than what was previously planned for October, it's still higher than bills are right now. You do not need to take any action to benefit from the scheme.

·       If you’re on a fixed tariff that is at a higher rate caused by recent energy prices, the government has said that your unit prices will be reduced by 17p/kWh for electricity and 4.2p/kWh for gas. Energy suppliers will adjust fixed tariffs automatically, so you do not need to take any action to get the benefits of this scheme. We recommend that you wait to hear what your new prices will be before deciding whether or not you want to switch back to your supplier's variable tariff.

·       If you pay by prepayment the EPG will be applied to the rate you pay for each unit of energy, so the money you put on the meter will last longer than it would have been without the EPG.   You will need to redeem your vouchers for the monthly discounts of £67 when they arrive.

·       If you receive benefits and were expecting further support as part of the scheme announced earlier in the year, this should still be paid to you as planned.


In addition, all households on the electricity grid will still receive a £67 discount on their October bill - the first instalment of the total £400 payment over the next six months. Most people will see this automatically credited to your energy account. If you pay by prepayment, you'll be sent vouchers to redeem wherever you top up. Please note you will not be asked for any personal or bank details for this.


It is important to note that the £2,500 EPG does not mean your total energy cost will be capped at this amount. 

The EPG relates to the unit cost of electricity and gas not your usage.

If you use more energy than the average you will pay more and if you use less, you could pay less.


If you are struggling to afford your energy costs you should contact your supplier(s) right away for advice and assistance.


Some useful sources of advice:

MyGov.Scot – Help with energy bills -

Home Energy Scotland -

Citizen Advice -

Home Heating Advice Scotland -

Energy Advice Scotland -

Energy Action Scotland -