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Britain extends household energy support scheme to June

The sun sets behind an electricity pylon in Borehamwood

LONDON (Reuters) -Britain extended its support for household energy bills by three months to the end of June, the government said on Wednesday, a measure that should help to contain rising living costs.

In a statement hours before finance minister Jeremy Hunt is due to announce the government's budget, he said Britain would maintain a price guarantee that will keep average annual bills at 2,500 pounds ($3,039) for an extra three months.

"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," Hunt said.

Under previous plans, announced late last year, government subsidies had been scheduled to be scaled back from the end of March, meaning average bills would have risen to 3,000 pounds.

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The government said wholesale energy prices have fallen by 50% since its last budget announcement in November, cutting the cost of funding the support scheme from April to June by two-thirds to 4 billion pounds.

The price guarantee will rise to 3,000 pounds from July until the end of March 2024 but the government believes it will no longer be needed. Average annual bills are expected to fall to around 2,100 pounds a year from July under the regulator Ofgem's price cap, according to analysts at Cornwall Insights.

The government also said on Wednesday it would make sure households on prepayment meters do not pay a premium for their energy, which it said would save 4 million families 45 pounds a year.

Prepayment meters have come under scrutiny after The Times newspaper reported earlier this year that debt agents working on behalf of Centrica's British Gas business had forcibly installed meters in some vulnerable customers' homes.

Regulator Ofgem said on Tuesday a ban on enforced prepayment meter installation would be extended beyond March 31 and until energy suppliers have proved they are working in accordance to a new code of practice.

($1 = 0.8226 pounds)

(Reporting by William James and Susanna Twidale, writing by Sarah Young; editing by Barbara Lewis)