Energy firms ‘expect government’s bills support to continue in April’

Bills are set to rise by an average of £500 from April

Some energy firms are planning to amend customer’s bills in anticipation that the government will keep support at or near current levels, according to reports.

Typical household energy bills are set to rise to £3,000 a year from April, but calls have been made for the government to retain its current level of support so they stay at £2,500 for the average household.

The government previously said help for bills was under review, but the BBC has reported that firms are adjusting bills in expectation of additional support, according to industry sources.

The Resolution Foundation think tank, which aims to improve living standards for people on low to middle incomes, and consumer rights champion Martin Lewis have both said chancellor Jeremy Hunt is highly likely to cancel the bills rise.

Meanwhile, the Institute for Fiscal Studies (IFS), an economics research institute, has forecast that the Treasury could afford to keep support at current levels until the summer due to wholesale energy prices falling sharply, meaning the cost of the scheme had been cut.

Energy UK, which represents suppliers, urged the government earlier this week to hold the level of support at £2,500 for an average household and to “announce that quickly” so firms could price it into bills from April.

At the moment, the government is limiting the typical household bill to £2,500 a year, plus a £400 winter discount, which will also end in April.

Regulator Ofgem has cut the amount suppliers can charge households for energy but bills are still set to rise by an average £500 from April.

From 1 April, the energy price cap will be set at an annual level of £3,280 for a dual-fuel household paying by direct debit based on typical consumption, a reduction of almost £1,000 from the current £4,279.

The fall reflects recent drops in wholesale energy prices – the amount energy firms pay for gas and electricity before supplying it to households.

The £3,280 figure indicates how much consumers on their energy suppliers’ basic tariff would pay if the Government’s Energy Price Guarantee (EPG) was not in place.

The Independent has approached the Treasury for comment.