MARTIN Lewis has warned households there is no £2,500 cap on bills.
The new Energy Price Guarantee (EPG) will apply from 1 October, replacing the price cap of £1,971 which currently applies.
It freezes bills at £2,500 – but that’s just the typical energy bill.
Speaking on ITV’s Good Morning Britain, Martin said there was ‘no £2,500 cap on what you can pay on energy bills’.
The money-saving expert said: “What there is is a cap on standing charges, which is a daily charge that you pay and the unit rate – how much you pay for each unit of gas and electricity you use – that’s what’s capped.”
The £2,500 figure is based on what energy regulator Ofgem calculates as the “typical” bill, he said.
“But if you use more, you’ll pay more,” he added.
“It’s a cap on your unit rates. It limits how much you pay for each unit of gas and electricity. It’s not a cap on total costs.
“The old price cap was not, and neither is the new guarantee, which is effectively a two-year price cap.
He said it was “miscommunication” to say it was an overall cap on bills.
The government announced the EPG to prevent bills from skyrocketing.
Under the price cap, which is set by regulator Ofgem and based on wholesale costs, bills had to be £3,500.
Instead, the government has frozen the average dual fuel bill on standard variable fares at £2,500.
But your bill may still be higher or lower depending on usage.
Your bills may also vary depending on how you pay. Paying by direct debit is the cheapest way to cover the cost of your bill.
But those with prepaid meters pay more.
Those who benefit from a standard dual fuel tariff and who pay their bills by direct debit will pay the following unit tariffs from October 1:
- 10.3p per kilowatt hour (p/kWh) for gas
- 34p/kWh for electricity
- A standing charge of 27p per day for gas
- A permanent charge of 45p per day for electricity
The amount can also vary very slightly depending on the company you work with, where you live and how you pay your bill.
Martin also warned households to take meter readings this week.
This could make your energy bill more accurate and help you avoid overpaying based on estimates.
Extra help with energy bills
There are programs offered by providers, local councils, charities and the government that could help.
If you’re struggling with energy costs or other bills, there are many organizations where you can seek advice for free, including:
You should talk to your energy provider first as they have programs in place to help you with bills and arrears, including hardship funds and grants.
For example, British Gas and Octopus have set up funds worth up to £750 to help customers struggling with their bills.
Your local council may also be able to help you with money and grants if you are struggling with bills through the household support scheme.
You should also check that you receive all the benefits to which you are entitled.
Use an online benefit calculator to make sure you don’t miss out on extra cash.
Likewise, you can look for charitable grants that help you pay gas and electricity bills.
There’s also more government help on the way in the form of one-off cost-of-living payments worth up to £1,500 depending on your circumstances.
Every household will get a £400 cut on their energy bill this winter – and payments will start from October 1.
Those on Universal Credit and certain benefits will receive a one-time payment of £650 – the first half reaching bank accounts within WEEKS.
Meanwhile, a payment of £300 will go to pensioners and a further £150 is now being paid to those receiving disability benefits.