Chancellor Jeremy Hunt has announced an extension of the energy price guarantee in the 2023 Spring Budget.

The support guarantee is set to continue for another three months, until the end of June. Bills were originally going to rise in April, from the cap of £2,500 per year for a typical family, to over £3,000. The extension comes as wholesale prices have dropped lower than expected since December. However, the additional £400 winter discount is still due to end in April.

The budget’s key measures can be read here.

Prime Minister Rishi Sunak said: “We know people are worried about their bills rising in April, so to give people some peace of mind, we’re keeping the Energy Price Guarantee at its current level until the summer when gas prices are expected to fall.

“Continuing to hold down energy bills is part of our plan to help hardworking families with the cost of living and halve inflation this year.”

Hunt said: “High energy bills are one of the biggest worries for families, which is why we’re maintaining the Energy Price Guarantee at its current level. With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.”

For customers on prepayment meters, energy charges are to be brought in line with that of those who pay by direct debit – a measure that the Chancellor says will be a welcome break for low-income families across the country. This comes after forced installations of prepayment meters were banned over the winter.

National Energy Action chief executive Adam Scorer says: “Sense has prevailed in today’s Budget. The Energy Price Guarantee has been rightly extended at the current level. It means the average annual bill will be around £2,500. And prepayment customers will no longer be charged more to receive their energy than direct debit customers – something we’ve long campaigned for.

“But, the Energy Bill Support Scheme has ended, meaning households will be £67 a month worse off. Energy bills from April will be higher than they’ve ever been during the crisis.

“There will be 7.5 million UK households in fuel poverty – up from 6.7 million. The cost of a warm and safe home is still out of reach for millions.”

Nicholas Harris, chief executive of Stonewater said: “The extension of the government’s Energy Price Guarantee for a further three months is welcome news for many of our customers.  However, it is disappointing for customers who receive their energy supply via a communal system as they are not currently protected by the same Ofgem energy price cap as individual domestic consumers who get their energy directly from a supplier. This is because the rules for commercial and domestic customers are different. We are disappointed that there has not been more government help for those with commercial supplies and have been campaigning through the National Housing Federation to highlight this position. We’d still like to see more done however, recognising the impacts on people in retirement or supported schemes.”