How Much Will Energy Bills Increase in April 2023?

✔ Energy bills are increasing by 19% in April 2023

✔ The average dual fuel household will pay £2,500 per year after 31 March 2023

✔ Energy prices should start to decrease in July 2023

The energy industry has been volatile over the past year – supplies have run low, prices have soared, and energy companies have gone bust. But what’s in store for 2023?

Brits will need to brace themselves for another spike in energy prices from April 2023, though by not as much as anticipated. Thankfully, energy bills should start to fall again in July, but experts have suggested prices probably won’t return to pre-pandemic levels.

Want a better idea of how much you can expect to pay for energy in 2023? We’ll take you through everything you need to know in this article, including information on prices, details on support from the government, and tips on how to reduce your bills.

What’s on this page?

Will your energy bills increase in April 2023?

UK households will see their energy bills increase again in April 2023 – though, not by as much as experts initially thought.

The government’s Energy Price Guarantee (EPG) will be kept at £2,500 per year for the typical household on a dual tariff. But remember, this figure is only relevant to a ‘typical’ household on a dual tariff. Larger households are likely to pay more than this for their energy bills.

Despite the EPG remaining at the same level, households will see their energy bills increase by an average of 19% in April. This is because the government will be altering the £400 Energy Bills Support Scheme so that it only supports vulnerable and low-income groups, rather than every household in the UK.

The unit cost of energy in the UK will also remain at 34p per kilowatt-hour (kWh) for electricity, and 10.3p per kWh for gas.

Brits don’t think this is enough, with 76% saying the government has fallen short when it comes to supporting them with energy bills in our National Home Energy Survey.

There is no price cap on non-domestic energy, which means businesses are going to experience another spike in energy bills. Thankfully, the government has recently laid out plans on how to support businesses through this challenging time – but more on that later.

Why are energy bills going up?

If you’re confused about why prices are going up again so soon, you’re not alone. There have been a lot of changed plans on the government’s end during the energy crisis, causing a lot of confusion.

Previous Prime Minister, Liz Truss, announced the EPG and claimed it would last for two years – meaning household bills would remain the same until 2024. However, after a change of Prime Ministers, new Chancellor Jeremy Hunt announced that the Energy Price Guarantee would only last for six months, ending in March 2023.

And after another change of plans, the Chancellor announced in the Autumn Statement 2022 that the EPG would last until April 2024. But there’s a catch: in April 2023 the EPG will increase by 20% to a cap of £3,000 for a typical household’s annual consumption.

And after – yep, you guessed it – another change of plans (this time for the better), the Chancellor announced that the EPG will remain at £2,500 for an additional three months, until June 2023. 

The key reason many of us will still see bills increase in April? The Energy Bills Support Scheme (EBS), which paid all UK households £400 between October 2022 and 31 March 2023, will be coming to an end for the majority of the UK, meaning the average energy bill will go from £2,100 per year to about £2,500 per year in April. That’s a 19% increase.

Why is the Energy Bills Support Scheme ending?

Technically, the Energy Bills Support Scheme isn’t ending – the support just won’t be available to everyone. Instead, the government has announced that it will provide financial help to vulnerable and low-income households throughout 2023.

There’s currently no news on whether the Energy Bills Support Scheme will be available to everyone again next winter.

Can you get help with your energy bills?

Instead of supporting everyone with their energy bills, the government has said it’s designing a “new, more targeted approach, which costs the taxpayer less”.

Under these new plans, vulnerable and low-income groups will receive the following payments to help with energy costs from April 2023:

• Low-income households – Households on means-tested benefits will receive £900 in total, spread across three instalments in spring 2023, autumn 2023, and spring 2024
• Pensioner households – Pensioners will receive £300 in winter 2023
• Disabled households – People on certain disability benefits will receive £150 in summer 2023

Over eight million households in the UK on means-tested benefits will be eligible for the £900 cost of living payment in 2023/2024. But to receive the grant, you’ll need to receive one of the following benefits:

• Child tax credit
• Income-based jobseeker’s allowance
• Income-related employment and support allowance
• Income support
• Universal credit
• Working tax credit
• Pension credit

You can find out more about these payments on the government website.

Support for businesses

UK businesses are struggling. Unlike the domestic energy scene, there is no price cap on companies’ energy bills, leaving many spending thousands of pounds on electricity and gas each month.

Thankfully, to prop up the economy during the energy crisis, the government is setting up a new Energy Bills Discount Scheme (EBDS) for businesses, charities, and the public sector. The new scheme will mean all eligible UK businesses and other non-domestic energy users will receive a discount on energy bills.

From April 2023 to March 2024, eligible non-domestic customers will receive a discount on their bills of up to £6.97 per megawatt-hour (MWh) on their gas bill and up to £19.61 per MWh on their electricity bill. These discounts will be automatically applied to eligible businesses’ energy bills.

When will energy bills come down again?

Although we can’t say for sure when energy bills will come down again, many experts in the industry estimate that Brits could see slightly cheaper prices by July 2023.

Finance company Investec has forecast that the cap for a typical annual energy bill will fall to £2,478 in the summer – down from the average of £2,500 a year in October 2022.

Other experts haven’t been as optimistic. For example, Cornwall Insight’s latest forecast estimates bills will be capped at about £2,800 from July, although this is still lower than the current rate.

The reason behind cheaper bills? Wholesale gas prices have fallen back to the price they were at before the war in Ukraine – mainly thanks to milder weather, which has led to higher levels of gas storage and less reliance on Russian gas.

Despite the good news of cheaper energy on the horizon, CEO of Norwegian energy company Equinor, Anders Opedal, has said he doesn’t think energy prices will return to pre-COVID levels.

Opedal told the BBC this comes down to the costs involved in moving away from fossil fuels, claiming that windfall taxes on energy firms are affecting investment in energy projects in the UK.

However, it’s important to note that Equinor, like many other energy companies, has reported record profits in the past year, whilst the UK struggles with a cost of living crisis. The fossil fuel business reported pre-tax profits of $24.3 billion (£19.8 billion) between July 2022 and September 2022 – a staggering jump from its $9.7 billion in the same period the year before.

How can you reduce your energy bills?

When it comes to reducing your energy bills, it can be difficult to know where to start – especially when the ball is mostly in the energy suppliers’ court right now.

If you can afford it, it’s worth making sure your property is well insulated. You’ll lock in that much-needed warmth, reach for the thermometer less frequently, and stay nice and cosy.

You could also look into installing some renewable tech, such as solar panels. Although a new solar panel system could set you back between £4,000 and £7,000, it’ll typically cut your electricity bill by 50%. You can find out more about this on our Solar Panel Costs page.

If you don’t have much money to play with, there are still ways you can cut back on your energy usage. It’s a good idea to insulate your windows by filling any cracks around the frame and adding thick curtains or blinds. Giving your radiators space to breathe also goes a long way.

Want to learn more? We’ve got lots of tips waiting for you on our page The Top 17 Ways To Reduce Your Energy Bills.

Why have energy bills increased?

The UK’s average energy bill has been rising because wholesale gas has become more expensive for energy suppliers to purchase. Between the start of 2021 and the end of 2022, the wholesale price of gas increased by 404%.

This spike in prices comes down to a few key factors, including low energy storage capacity in Britain and the rest of Europe, insufficient levels of liquefied natural gas (LNG) to back up energy supplies, and – of course – Russia’s invasion of Ukraine, which has reduced gas supplies in Europe.

You can find out more about this on our page: Why Are UK Energy Bills Always Rising?

Summary

The prospect of energy prices going up again will understandably feel very daunting to a lot of people. Not only will this situation be tough for homeowners around the UK, but businesses will also suffer – having a knock-on effect on the rest of the economy.

Thankfully, we’re starting to see a glimpse of the light at the end of the tunnel, as experts predict prices could start falling again soon. In the meantime, the government will have to support as many people as it can, until energy prices become more stable.