The government has ruled out further help for households with energy bills, although costs remain at historically high levels.
On Thursday, Ofgem is expected to announce a sharp cut in the price cap that limits how much suppliers can charge per unit of energy.
The amount is expected to drop to around £2,000, almost double the amount when the cap was announced in 2019.
Environment Minister Therese Coffey said the chancellor outlined his plan to help households months ago.
She told the BBC on Sunday with Laura Kuenssberg that it was more important that the UK build its own energy infrastructure, such as nuclear power stations and more offshore wind farms.
Since last October, household energy bills have been capped at £2,500 under the government’s energy price guarantee scheme.
All houses also received £400 each from the state during the winter.
The energy price guarantee system is scheduled to expire at the end of June. As the price cap set by regulator Ofgem is expected to be below the energy price guarantee scheme, bills will no longer be subsidised.
Ms Coffey said: “The Chancellor set out our plans on what was happening there a few months ago and I am aware that only a limited amount is going to each bill payer.”
“But I think the key thing people are going to expect from government is for the power line to be laid within our own country, rather than constantly depending on aspects of the linkage to gas prices in the world.”
People on low incomes, as well as the elderly and disabled, continue to receive assistance. However, consumer finance expert Martin Lewis said: “It’s the people who are just above the threshold and not receiving living expenses support for whom £2,000 a year on energy bills is prohibitive.”
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When the price cap was introduced in January 2019, the typical household bill for gas and electricity was £1,137.
It has since climbed as high as £4,279 earlier this year before falling slightly to £3,280 in April when Ofgem announced its latest price cap.
Gas prices rose sharply after Russia – a major energy producer – invaded Ukraine and faced sanctions from a number of countries including the UK.
Households are protected from the price ceiling by the state guarantee system.
But Mr Lewis said: “It’s worth remembering that in April everyone lost.” [£400] Support for the Winter Law, so in practice people will not get any real benefit from it.
“You will pay the same as in winter.”
Advisory group Cornwall Insight predicts a household’s typical energy bill will drop to £2,054 between July and September for a dual-fuel bill paid by direct debit.
But it said: “Although the cap has come down due to the sky-high prices of the last two years, the figure is still over £1,000 a year, more than the pre-pandemic price cap.”
“We currently do not expect bills to return to pre-2020 levels until the end of the decade at the earliest.”
Mr Lewis also pointed out that the basic charge on energy bills is around £300, which he described as “the amount we all pay just to have gas and electricity”.
Ms Coffey said: “I expect we’ll continue to look at the different ways these charges are passed on to billpayers, but I know there’s also significant support out there to help people, particularly with the lowest ones Income, in the cost of living challenge.”
- If you can, avoid using an electric stove to cook your food – gas hobs, slow cookers, air fryers and microwaves are much cheaper
- Setting your washing machine to 30°C can save you money
- Turning your thermostat down just one degree can save you up to £229 a year
You can find more tips here
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