The new government Energy Price Guarantee

On 8 September the government announced a new Energy Price Guarantee starting from 1 October which will limit the energy bill for a typical household to £2,500

This means the price you pay for your energy will be lower than the previously announced price cap, but your overall energy cost will still be determined by how much energy you use. While full details can be found below, here are some key things to know:

  • You do not need to get in touch or apply for the government Energy Price Guarantee
  • The government Energy Price Guarantee is automatically applied to all customers, regardless of whether you are on a fixed or standard variable tariff.
  • It is in addition to the Energy Bills Support Scheme discount of £400, which you’ll receive over the next 6 months.

Alongside the government’s new package we will also be supporting customers with a real and immediate need through OVO’s Customer Support Package. You find out more about this on our dedicated Customer Support Package webpage.

What’s causing energy prices to rise?

Global supply shortages and the end of lockdowns caused initial increases in wholesale energy prices. But energy bills have increased significantly because of Putin’s invasion of Ukraine. The war has caused gas and electricity prices to surge to unprecedented levels. And they’re likely to continue rising in the coming months.

While the wholesale cost of gas and electricity is still rising, the government has introduced a new Energy Price Guarantee which will limit energy bills to £2,500 for a typical UK household.

This means the price you pay for your energy will be lower than the previously announced price cap, but your overall energy cost will still be determined by how much energy you use. You can learn more about the scheme in the FAQ section.

What’s causing energy prices to rise

What’s causing energy prices to rise?

Global supply shortages and the end of lockdowns caused initial increases in wholesale energy prices. But energy bills have increased significantly because of Putin’s invasion of Ukraine. The war has caused gas and electricity prices to surge to unprecedented levels. And they’re likely to continue rising in the coming months.

While the wholesale cost of gas and electricity is still rising, the government has introduced a new Energy Price Guarantee which will limit energy bills to £2,500 for a typical UK household.

This means the price you pay for your energy will be lower than the previously announced price cap, but your overall energy cost will still be determined by how much energy you use. You can learn more about the scheme in the FAQ section.

Energy producers and energy suppliers are different

You may have read about fossil fuel companies and electricity generators making large profits at the moment. These companies are energy producers - they either extract energy from the ground, like oil and gas, or operate electricity generation assets like power stations or wind farms.

We don’t produce or generate any energy. In fact, we’re the only major energy supplier that has no energy generation assets at all. This means we’re not benefitting from the increase in energy prices.

Energy producers and energy suppliers are different

Energy producers and energy suppliers are different

You may have read about fossil fuel companies and electricity generators making large profits at the moment. These companies are energy producers - they either extract energy from the ground, like oil and gas, or operate electricity generation assets like power stations or wind farms.

We don’t produce or generate any energy. In fact, we’re the only major energy supplier that has no energy generation assets at all. This means we’re not benefitting from the increase in energy prices.

What OVO's doing to help

Whilst the Energy Price Guarantee will be a great help for many people, we know it won’t be enough for everyone. 

That's why we've announced OVO’s Customer Support Package to help customers with a real and immediate need.

What OVO's doing to help

What OVO's doing to help

Whilst the Energy Price Guarantee will be a great help for many people, we know it won’t be enough for everyone. 

That's why we've announced OVO’s Customer Support Package to help customers with a real and immediate need.

Accessing government support: the Energy Price Guarantee and Energy Bill Support Scheme

On 8 September the government announced a new Energy Price Guarantee starting from 1 October which will limit the energy bill for a typical household to £2,500. It is in addition to the government’s Energy Bills Support Scheme, a £400 refund paid to all customers in instalments between October 2022 and March 2023. Customers don’t need to apply for either. More information is provided below on the Energy Price Guarantee or if you want to find out more about Energy Bills Support Scheme, we’ve set up this dedicated page.

What's happening in the energy sector and why

As Putin’s war on Ukraine continues, gas and electricity prices are surging to unprecedented levels. On 8 September, the government announced that an Energy Price Guarantee will be set at £2,500 for a typical UK household. You can learn more about the scheme in the FAQ section below.

Global supply shortages and the end of lockdowns caused initial increases in wholesale energy prices. But Putin’s invasion of the Ukraine has caused gas and electricity prices to surge to unprecedented levels. 

On 8 September, the government announced that from 1 October, a new Energy Price Guarantee will mean a typical UK household will now pay up to an average £2,500 a year on their energy bill for the next two years. The Energy Price Guaranteed is applied automatically for all customers, you do not need to call us or apply for it.

This is in addition to the government’s Energy Bills Support Scheme. Customers do not need to apply for either scheme.

Our priority right now is making sure you have as much support as we can provide through this challenging period. We’ve recently announced OVO’s Customer Support Package worth £50m to help customers with a real and immediate need.

We can also help make sure you’re getting the right financial support from the government, provide help through OVO-led schemes or give you practical energy efficiency tips that could help reduce your bills moving forward.

On 8 September, the government announced that an Energy Price Guarantee will be set at £2,500 for a typical UK household for the next two years. Customers do not need to apply for this, and you can learn more about the scheme below.

We’re an energy supplier, not an energy producer.

You may have read about fossil fuel companies and electricity generators making large profits at the moment. These companies are energy producers - they either extract energy from the ground, like oil and gas, or operate electricity generation assets like power stations or wind farms.

We don’t produce or generate any energy. In fact, we’re the only major energy supplier that has no energy generation assets at all. This means we’re not benefitting from the increase in energy prices.

Because of the complicated way the energy markets work in the UK, the price of gas impacts the price of both renewable and non-renewable electricity. Here’s why;

The energy grid gets power from renewable sources like wind. But because there isn’t always enough supply to meet everyone’s needs all the time, the grid has to be topped up with other types of electricity. This top-up often comes from electricity that's been generated from burning gas, a non-renewable source of energy. 

This expensive gas-powered electricity then sets the price for all the electricity on the grid at that time - including the renewable power. And because gas now costs 11 times more than it did 3 years ago, the cost of the energy we get from the grid has gone up as well.  

So, even if you have an energy plan with 100% renewable electricity, or you only use electricity - the price of your energy is very much linked to the price of gas. 

This clearly doesn’t work in the interests of UK energy customers, and we’re working with the government to find a better long-term solution.

The government’s new Energy Price Guarantee

On 8 September the government announced a new Energy Price Guarantee starting from 1 October. This means a typical household will now pay £2,500 a year on their energy bill for the next two years. This is around £1,000 less than the previously announced Price Cap rates that were due to go into effect on 1 October. This applies to everyone - whether you’re on a fixed or variable tariff.

This means the price you pay for your energy will be lower than the price cap rates previously announced in August, but your overall energy cost will still be determined by how much energy you use. 

  • You do not need to get in touch or apply for the government Energy Price Guarantee
  • The government Energy Price Guarantee applies to all customers, regardless of whether you are on a fixed or standard variable tariff.
  • It is in addition to the Energy Bills Support Scheme discount of £400, which you’ll receive over the next 6 months, from October to March.

Yes. The Energy Price Guarantee applies to all customers, regardless of whether you’re on a fixed or Standard Variable Tariff. It applies to the price you pay per unit of energy - your ‘unit rate’.

Whatever your current plan is, we will be getting in touch in the coming weeks to let you know what your new rates will be.

If you're currently on a fixed plan that's priced below the Energy Price Guarantee your rates will not change, and you don’t need to do anything. This is because the price you pay for your energy is already lower than the government's Energy Price Guarantee. At the end of your fixed plan, you’ll move onto our Standard Variable Tariff, where the Energy Price Guarantee rates will apply. 

If you're currently on a fixed plan where prices for a typical household are between £2,500 and £3,500 per year, your rates will automatically be discounted from 1 October in line with the government’s Energy Price Guarantee. We’ll be in touch over the next few weeks to confirm exactly what this means for you. 

If you're currently on a fixed plan where prices for a typical household are over £3,500 per year, we'll automatically move you to our Standard Variable Tariff. This will mean you're on the best rates possible. We'll take care of everything and we'll be in touch over the next few weeks to confirm exactly what this means for you.

If you don't hear from us before 1 October, please don’t worry - your rates will still be discounted from 1 October to make sure you don't pay more than you should.

And remember, the Energy Price Guarantee is a limit on the unit rate you pay for your energy - meaning a typical household’s usage would result in a bill no more than £2,500 per year. If you use more than a typical household, your bill will be more.

We’ll be getting in touch soon to let you know if your plan or the rate you’ll be paying is changing. These price changes will come into effect from 1 October. If you’re close to the end of your current plan and we’ve already communicated with you about this, the conditions of the government’s new Energy Price Guarantee will apply going forward.

The new rates based on the Energy Price Guarantee will come into effect on 1 October 2022.

If you're on a Standard Variable Tariff you'll be notified of your new rates in the coming weeks. 

If you're on a fixed plan - where the price you pay per unit of energy is fixed for a certain period of time - the Energy Price Guarantee also applies to you too. We’ll be in touch in the coming weeks to explain what this means for you.

Yes, the government’s Energy Price Guarantee is in addition to the £400 discount payment provided through the government’s Energy Bills Support Scheme. To find out more about the Energy Bills Support Scheme, you can visit our dedicated web page.

Yes, the Energy Price Guarantee will be automatically applied to your bill from 1 October so you don't need to take any further action to receive it.

No, the Energy Price Guarantee is a limit that is applied to the unit rate - that’s the cost you pay per unit of electricity or gas. The Standing Charge remains at the level set out by the most recent Price Cap. If this changes in the future, we'll let you know.

At the moment, we cannot say for certain. It’s the government’s guarantee and they have  committed to a typical household not paying more than £2,500 per year over the next 2 years.

How much you save will depend on the plan you’re currently on. For customers on our Standard Variable Tariff, the typical household will save around £1,000 per year compared to the previously announced price cap of £3,549. 

Whilst this will help some people to pay for their energy this winter, we know many will still struggle. If you’re worried about your energy bills or struggling financially, please get in touch with us. There are lots of ways we can support you. We’ve helped lots of people in similar situations and we can support you too.

No, you do not need to pay this money back.

The government’s Energy Price Guarantee will be applied directly to the unit rates of the tariff. Whoever is named on the account will benefit from this.  

The government is encouraging all landlords to come to an agreement with tenants on the Energy Price Guarantee in line with the arrangement in your tenancy agreement, and is exploring a range of options to ensure this happens. We recommend you reach out to your landlord to discuss this.

The Energy Price Guarantee is a limit on the unit rate - the price you pay per unit of energy. This means that for a typical household, their energy use would result in a bill no higher than £2,500 per year. If you use more energy than the typical household (that's 2900 kWh of electricity and 12000 kWh of gas per year), your bill would be higher than this

If your Direct Debit payments need to change, we’ll be in touch with you directly.

Energy efficiency and energy use

We’re here to offer you support and advice on how to make your home more energy efficient this winter, so you can reduce your energy bills.

To reduce your energy consumption and what you pay for energy this winter you can do three things: reduce energy loss in your home, reduce unnecessary energy use and track your energy consumption so you know where your home’s using energy.

If you can’t make any of these changes to your home or you’re still worried about your energy bills or struggling financially, get in touch with us. There are lots of ways we can support you. We’ve helped lots of people in similar situations and we can support you too.

Here are a few key ways you can reduce how much energy your home uses this winter:

Reducing your home’s energy loss

If you can, adding insulation like a hot water cylinder jacket to your hot water tank, or reflector panels behind your radiators can help keep heat in your home, and reduce your bills.

Reducing unnecessary energy use

  • Check your boiler pressure: the ideal boiler pressure is usually between 1 and 2 bar (this varies from boiler to boiler, so also check your boiler manual for the correct information). If you’re able to, check yours and if the pressure isn’t what it should be, read the instruction manual to learn how to change it.
  • Bleed your radiators: if you’re able to, bleeding your radiators helps to keep your central heating working efficiently – it makes sure that you’re getting the most heat possible out of your radiators.
  • The Energy Saving Trust also has lots of recommendations on how to use energy efficiently.

Keeping track of your energy use

Smart meters measure how much energy you use, then share this info with you via your online account and on an In-Home Display (IHD). Unlike a traditional meter, you can see how much energy you’re using in real-time on the IHD.

This can help you make small changes to reduce how much energy your home uses and cut your bills. To find out if you’re eligible, use the smart meter appointment tool.

You can also see exactly how your home’s using energy, with OVO’s free energy tracking on our app and in your online account.

Here are trusted organisations you can contact for more energy-saving advice and tips:

For Scotland:

Citizens Advice Scotland 

Advice Direct Scotland

Price increases and your Direct Debit

The increase in wholesale prices of gas and electricity will impact your monthly Direct Debit payments. We have a range of support and advice in place to help you manage these uncertain times. Paying your bills by Direct Debit will still help you to smooth out payments over a 12 month period and is an important budgeting tool as the cost of living increases.

Your Direct Debit is calculated by using your past energy use as a guide. We take this amount (or an estimate, if you’re new to OVO) and multiply it by the cost of energy. This will now be limited by the government’s Energy Price Guarantee of £2,500 from 1 October. 

We add the cost of your standing charge (this is like line rental for broadband), and any add-ons. If you have any credit or debt on your energy account already – we also factor this into the total.

And then divide that total by 12 – so you have a ‘cost per month’. This cost per month is your Direct Debit amount. The reason we divide it by 12 is so that you can pay the same for your energy all year round - even though you might use more in the winter, and less in the summer.

Here’s how this might work in practice:

  1. Say you use 1,000 units of energy over the year and this energy is charged at £1 per unit (that’s just an example to make the maths easy) – your energy costs for the year would be £1,000. And say your standing charge cost is £100. That means you have a total of £1100 to pay over 12 months.
  2. But if you already have £100 credit in your account – that’s £100 less to pay.
  3. So overall you need to pay £1,000 over 12 months. Which works out at £83.33 each month. So your Direct Debit would be £83.33.

If you start using less or more energy at any time during the year – your Direct Debit would change to factor that in. This process is called a ‘Direct Debit Review’. Our aim is that you’ll always end each 12 month period (or your fixed plan, if you’re on one) with a balance of £0. This avoids you having to pay a lump sum unexpectedly.

We believe it’s really important that this information is accessible; it's your money, so we want to be as clear as possible about how we set Direct Debits and what you're paying for.

We’re currently working closely with MoneySavingExpert and a wider team of energy suppliers and charities to make sure all energy providers are transparent about how we calculate Direct Debits.

We’ve recently announced OVO’s Customer Support Package worth £50m to help customers with a real and immediate need.

We’re working closely with StepChange, the debt charity, to support customers who need to closely assess their finances and may require help in challenging situations. That’s why we donated £2 million to StepChange to help them continue the vital support they provide.

On 8 September, the government announced that an Energy Price Guarantee will be set at £2,500. We’re quickly working through the details of the announcement and assessing how this affects all of our customers. We’ll share more information as soon as possible.

Like all energy suppliers, we’re participating in the Government’s upcoming Energy Bills Support Scheme offering a £400 non-repayable discount to eligible households to help with energy bills from October. This is in addition to the government’s Energy Price Guarantee which comes into effect on 1 October.

Everyone’s energy bills will differ, depending on how much energy you use and your specific circumstances.

Your Direct Debit is calculated using 12 months of historical usage (what you’ve used in the past) multiplied by the price cap as set by Ofgem. We add your account balance to this and divide by 12 monthly payments (or the duration of your remaining contract).

On 8 September, the government announced that an Energy Price Guarantee will be set at £2,500. We understand some customers have already adjusted their Direct Debit amount to reflect the previously announced price cap. However we are contacting all customers to notify them of how the government’s Energy Price Guarantee affects their Direct Debit payments.

Yes, we will always communicate any changes to your Direct Debit in good time to make sure you have the full picture and can take necessary action.

We’ll give customers 14 days’ notice (10 working days) of the new Direct Debit amounts and everyone will have 11 days to change their Direct Debit plans. You can see your Direct Debit payment amount on your OVO/SEE account or via the app. There you’ll also find some helpful information on how we calculate your Direct Debit and further FAQs.

If your Direct Debit payments need to change, we will be in contact with you.

From time to time, you might find that you’ve built up a positive balance on your OVO account. That’s because your energy use varies throughout the year based on your use. Typically, you will use more energy in the winter than the summer.

Your Direct Debit payments are an average of your predicted use over a 12 month period so you may notice your account in credit during the summer months.

As we face significant increases in the cost of energy, we’d encourage you to leave your account in positive balance heading into the winter as it will help to smooth out your monthly payments when you are using more energy. However, we know with the cost of living rising across the board, money can be tight so the ability to apply for a refund is always available to you.

We run a Direct Debit check-in on all of our customer’s accounts to make sure your payments match the energy you’re using. We run them regularly, even for those with a positive balance. This helps us to ensure that you don’t finish the 12 month Direct Debit period with a negative balance that can impact your household budget.

There may be situations where the rising prices, and the fact that you'll use more energy in the winter, mean that you need to increase your payments to avoid a sharp price rise later in the year. We know many of our customers will have a positive balance at the moment due to the summer months.

We might need to adjust the Direct Debit amount to reflect your current use while you might have a positive balance on your account. The positive balance will be used to smooth out your bills during part of the year when you use more energy. This positive balance helps you be less exposed to future price increases.

Yes, you will pay less through Direct Debit plans. We estimate our average customer will save £129 a year by choosing Direct Debit.

Paying a monthly Direct Debit amount also means you don’t have to spend time paying your bills every month, and makes it easy to split the cost of your energy bills into equal payments throughout the year. You’ll be able to budget more consistently which will help you to manage the significant increases in the cost of living that we are all facing.

The Energy Bills Support Scheme (EBSS) payment will be passed on directly to our customers from October 2022. Direct Debit customers will receive the £400 as six separate payments over 6 months, directly into their bank accounts between October and March 2023. This means customers will receive £66 in October and November and £67 in December, January, February and March respectively. It won’t be paid to you through reductions in your Direct Debit.

On 8 September, the government announced additional support for energy bills through the Energy Price Guarantee. This is in addition to the Energy Bills Support Scheme and both schemes will be automatically applied to customers from 1 October. If we think your Direct Debit needs to be adjusted, we will get in touch.

Additional support

If you’re worried, please speak to our team as soon as possible. We’ve supported lots of people and we’re here to support you.

We’re doing everything we can to support you and our customers during this difficult time, in particular through OVO’s Customer Support Package worth £50m, which will assist our customers through the winter.

We’re ready to help those who may need additional support over the coming months. Our trained teams of specialists can give you the right advice and support to best suit your needs and circumstances.

From advice on energy efficiency and where to go to speak to specialist organisations and charities, our teams are on hand to help. Even if you're not sure that you might need specialist help, we are on hand to help.

You can find out more about OVO's Customer Support Package on our dedicated webpage.

We’re also working with partners like MoneySavingExpert, StepChange, and NEA to make sure the industry as a whole works together to help people who need it most.

As always, we want you to get in touch. We can help you in these ways:

  • Payment plans tailored to your financial situation, to help you spread the cost of what’s owed over time - find out more about our Customer Support Package.
  • Practical energy efficiency tips that could help lower your bills moving forward.
  • Practical advice on energy debt and where to find free, independent advice from other organisations and charities.

We can also help make sure you’re getting the financial support you’re entitled to, with details for OVO-led schemes and other payment schemes such as:

  • The Fuel Direct Scheme run by the Department for Work and Pensions, which helps you pay for your energy directly from your benefits.
  • The Warm Home Discount Scheme which is closed for this winter but reopens in November 2022 for support by March 2023.
  • The government’s Cold Weather Payment and Winter Fuel Payment.

If you’re concerned about topping up or paying your energy bill, contact us as soon as possible. We are here to help, our teams will be able to talk you through your options and help advise on what might work best for you.

We’ve supported lots of people in similar situations – and we can support you too. The sooner you speak to us the easier it will be to talk you through what support and advice is available.

Let us know if:

  • Your financial circumstances have changed
  • You’re elderly, have a disability or long term illness

We’re here to work with you to make a suitable plan, go through ways to bring down your usage and talk to you about organisations that can also help.

If you’re worried, please get in touch with us.

We understand that lots of our customers are feeling worried about upcoming energy changes.

On 8 September, the government announced a new Energy Price Guarantee starting from 1st October. This is in addition to the Energy Bills Support Scheme, also starting on 1 October. We’ve also recently announced OVO’s Customer Support Package worth £50m to help customers with a real and immediate need. You can find out more information on our webpage. Customers do not need to apply for these measures. 

Additionally, our energy efficiency guide sets out ways to save energy at home and reduce energy usage, as well as advice on financial help and what assistance is available.

We also encourage customers to look into our winter initiatives and support packages, review government assistance and ensure they’re speaking to their local council and housing associations to ensure their homes are fully equipped for the winter ahead.

If you’re concerned about topping up your meters or paying your energy bill, contact us as soon as possible. We’re here to help. Our teams will be able to talk you through your options and advice on what might work best for you.

We recognise this is a worrying time for many of our customers. We’re here to support you through our advisory teams, OVO’s Customer Support Package worth £50m, as well as through our work with charity partners, including StepChange the debt charity.

If you’re worried, please get in touch with us as soon as possible so we can hear your concerns and point you in the right direction.

In addition to what OVO is doing, on 8 September the government announced that an Energy Price Guarantee will be set at £2,500 for a typical UK household from 1 October. We’re quickly working through the details of the announcement and assessing how this affects all of our customers. The Energy Price Guarantee is in addition to the Energy Bills Support Scheme and customers do not need to apply for either scheme.

We work with a number of charities and organisations that offer free support.

For free, independent advice on debt, energy bills, and other areas where you might need support, these organisations and charities can also help: