The guarantee, which was launched in September and capped average energy bills at £2,500, was originally meant to be in place for two winters.
It will now change in April capping average bills at £3,000 for the next year, although many households will pay more than this.
It had been predicted that bills would rise to an average of £3,730 at this point, according to analysts at Cornwall Insight.
Hunt confirmed the change today and said this additional support will reduce energy bills by around £500 per household.
It comes as energy bills have risen significantly this year with the average household energy debt rising by a fifth (19 per cent) to £190 in the past year.
Hunt said: “There is a global energy crisis, a global inflation crisis and a global economic crisis. But today with this plan for stability, growth and public services, we will face into the storm.”
‘Life will be tougher next spring’
Sarah Coles, senior personal finance analyst for Hargreaves Lansdown, said: “The new energy support package will come as something of a relief for average earners, who were worried they might be left out in the cold. The new package, from April, will keep bills at £3,000 for average users – protecting them from a rise to as much as £3,700.
“This still leaves them with a horrible mountain to climb. In March, this year we were paying an average of £1,277 on our energy bills, so we’ll have to find almost two and a half times more cash to pay our bills within 13 months. The fact that this comes on top of so many other price rises means life is going to get even tougher next spring.”
Hikes to the energy windfall tax
And, as predicted by experts in Mortgage Solutions last week, the government also confirmed it will increase the energy windfall tax to 35 per cent, from 25 per cent, to raise an extra £14bn.
The tax, known as the Energy Profits Levy, will rise on 1 January and stay at the higher rate until 2028. A temporary 45 per cent levy on electricity generators will also be introduced from 1 January.
The government has been under pressure to increase the tax as energy prices in the UK rise significantly.
Hunt also announced further cost of living payments which will be made next year to some people. Those on means-tested benefits will receive a £900 payment, pensioners will receive £300, and those receiving disabled benefits will receive another £150 payment.
There will also be a 12-month extension to the household support fund.
