MARTIN Lewis has warned households that there is no cap of £2,500 on bills.
The new Energy Price Guarantee (EPG) will apply from October 1, replacing the £1.971 price cap that applies now.
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It freezes bills at £2,500 – but that’s just the typical energy bill.
Speaking on ITV’s Good Morning Britain, Martin said there is “no cap of £2,500 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 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 the 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 on each unit of gas and electricity. It is not a cap on total costs.
“The old price cap wasn’t, and the new guarantee, which is effectively a two-year long price cap, isn’t either.
He said it was a “miscommunication” to say that it was an overall cap on bills.
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The government announced the EPG to stop bills from rocketing further.
Under the price cap, which is set by the regulator Ofgem and based on wholesale costs, bills were set to rise to £3,500.
Instead the government has frozen the average dual fuel bill on standard variable tariffs at £2,500.
But your bill can still be higher or lower depending on usage.
You bills can also vary depending on how you pay. Paying by direct debit is the cheapest way to cover the cost of your bill.
But those in prepayment meters pay more.
Those on a duel fuel standard tariff and who pay their bills by direct debit will pay the following unit rates from October 1:
- 10.3p per killowatt hour (p/kWh) for gas
- 34p/kWh for electricity
- A standing charge of 27p per day for gas
- A standing charge of 45p per day for electricity
The amount can also vary very slightly based on the company you’re with, where you live as well as how you pay your bill.
Martin also warned households to take a meter reading this week.
It could make your energy bill more accurate, and help you avoid overpaying based on estimates.
Extra help with energy bills
There are schemes offered by suppliers, local councils, charities and the government that could help.
If you’re struggling with energy costs or other bills there are plenty of organisations where you can seek advice for free, including:
You should speak to your energy supplier in the first instance as they have schemes in place to help 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 who are struggling with their bills.
Your local council may also be able to help with cash and grants if you are struggling with bills through the Household Support Scheme.
You should also check that you’re getting all the benefits you’re entitled to.
Use an online benefits calculator to make sure you’re not missing out on any extra cash.
Similarly, you can search for charity grants that help you pay for gas and electricity bills.
There’s more help from the government on the way too in the form of one-off cost of living payments worth as much as £1,500 depending on your circumstances.
Every household will get £400 off their energy bill this winter – and payments start from October 1.
Those on Universal Credit and certain benefits will get a £650 one-off payment – with the first half hitting bank accounts within WEEKS.
Meanwhile a payment of £300 will go to pensioners and £150 extra is being paid now to those getting some disability benefits.
