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Cost of living: When is the government's last energy bill support payment to households?

A British government advert offering people help with winter energy bills is seen on the side of a bus in Stockport, Britain, November 16, 2022. REUTERS/Phil Noble
The government support payments to reduce energy bills will end this month. (Reuters)

Squeezed households face another hit to their finances as the government's six-month energy bills support scheme draws to a close.

Last October, the government gave every household a £400 payment in order to reduce their energy bills, split into monthly payments of £67, the last of which will be paid in March.

As of 1 April, this support will be brought to a close, meaning homeowners should prepare for higher bills, regardless of the arrival of spring with its longer hours and warmer weather.

In addition, current policy states that the energy price guarantee – a government initiative to lower the price of energy so that the typical household pays £2,500 a year – is due to get less generous from April, bringing the typical bill to £3,000.

However it is now understood that Jeremy Hunt is planning to keep support at its current level.

What is the energy bills support scheme?

Between October 2022 and March 2023 every household in Britain was given £400 off energy bills via a series of payments to reduce the financial strain of rocketing fuel costs.

Households paying by direct debit saw their bills automatically reduced via their supplier, and people with prepayment metres were sent vouchers.

The final payment of the scheme is in March, meaning many households could find themselves struggling further to pay their bills.

Chancellor of the Exchequer Jeremy Hunt arrives in Downing Street, Westminster, London, ahead of the first Cabinet meeting with Rishi Sunak as Prime Minister. Picture date: Wednesday October 26, 2022. (Photo by Victoria Jones/PA Images via Getty Images)
Chancellor of the Exchequer Jeremy Hunt has been urged to cap energy prices for a further three months to ease the burden of rising bills when the Energy Bills Support Scheme ends in April. (Getty)

What happens in April?

As well as the end of the energy support payments, April is set to see the reduction of the energy price guarantee.

The scheme was introduced last winter to reduce the unit cost of electricity and gas for UK households, and meant the average household will pay £2,500 a year for their energy.

This is due to rise to £3,000 in April.

Charities and campaigners have urged Rishi Sunak and Jeremy Hunt to reconsider the increase, and to keep prices capped at their current level.

Watch: Ofgem lowers energy price cap but bills still expected to rise for households

And while it has not yet been officially confirmed, it is believed the cap could be extended until July. Some energy firms are already planning to amend customer’s bills in anticipation that the government will keep support at or near current levels

Energy UK, which represents suppliers, has urged the government 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.

And financial expert Martin Lewis told BBC Radio 4 that there was a "better than 50% chance" the energy price guarantee would not rise to £3,000 as previously planned.

He said: "I wouldn't say it's a done deal. I wrote a letter to the chancellor three weeks ago... saying don't do this its not good for individuals to put prices up, it's not good for people's mental health, it's not good for consumer confidence which means it's bad for business.

"It would also keep the inflation rate down if we don't put prices up - it's a bit of a no brainer."

Money Saving Expert's Martin Lewis during a joint press conference with Facebook at the Facebook headquarters in London. (Photo by Kirsty O'Connor/PA Images via Getty Images)
Money Saving Expert's Martin Lewis has predicted the government energy price cap will be extended. (Getty)

The Institute for Fiscal Studies (IFS) has forecast that the Treasury could afford to keep support at current levels until the summer due to wholesale energy prices falling sharply, and energy secretary Grant Shapps previously said he is "very sympathetic" to suggestions that the planned £500 rise in bills should be stopped.

Read more: Will your energy bill go up next month or not? Here's what we know