Martin Lewis has explained the cheapest way to pay your energy bill after the price cap for October was finally confirmed.
Ofgem has announced that its price cap will rise to £3,549 from October 1 - this is up 80% from the current figure of £1,971.
But writing in the latest MoneySavingExpert email, Martin explained that the price cap varies depending on your payment method.
The £3,549 figure applies to households on default tariffs paying by direct debit.
Are you worried about rising energy bills? Let us know by emailing: mirror.money.saving@mirror.co.uk
For those paying by prepayment meter - typically vulnerable households or those struggling to pay for their energy - there is a bigger jump from £2,017 to £3,608.
Standard credit customers - so where you pay once you've received your bill - will see their price cap rise from £2,100 to £3,764.
This means paying by direct debit is the cheapest way of paying and it means you know exactly how much is coming out of your bank account each month.
However, direct debits are normally based on an estimate of the energy your supplier thinks you’re using.
It is important your supplier isn’t overestimating your usage, otherwise you could end up paying more.
You can make sure your direct debits are as accurate as possible by supplying regular meter readings.
If you think you’re being charged too much, speak to your supplier and ask it to explain a breakdown of your charges.
Ofgem licence conditions set out guidelines for "fair and reasonable" direct debits - which means your supplier must take steps to ensure you’re being charged correctly.
“The prepay cap is 2% more than direct debit, receipt of bills 6% more. Iit can vary by firm - we're going to do some work on that,” said Martin.
“Ditching direct debit may help with your cash flow if your direct debit is set too high… but it's important to understand that in the long run you'll pay more, whereas if you overpay while on direct debit you're eventually due that money back.”
Approximately 24 million households are covered by the energy price cap, including four million on prepayment meters.
The price cap sets a limit on the rates a supplier can charge for each unit of gas and electricity you use.
It also sets a maximum rate for the daily standing charge, which is what you pay to have your home connected to the grid.
Are you worried about rising energy bills? Let us know by emailing: mirror.money.saving@mirror.co.uk
