Martin Lewis has revealed the 15 things households should know following the announcement of an energy price guarantee today.
Prime Minister set out her plans to tackle the energy crisis amid soaring bills across the UK.
Truss announced that she will be freezing bills at the £2500 mark, as the Government plans to ease the impact of the rising cost of living.
This new figure is around £500 higher than current levels, however the price cap is set to rise by 80% on October 1.
Once that rise happens, the £2500 figure will be around £1000 below the Ofgem price cap.
Following the announcement, Money Saving Expert Martin Lewis took to Twitter to share the 15 tips homes need to be aware of.
He said: “New energy price guarantee - 15 quick need to knows for CONSUMERS. Please feel free to share...”
New energy price guarantee - 15 quick need to knows for CONSUMERS. Please feel free to share...#energybills #priceguarantee pic.twitter.com/IbQkJqXJoq
— Martin Lewis (@MartinSLewis) September 8, 2022
The 15 points are as follows:
- “The new price guarantee starts October 1, and for someone on typical use will be £2500/yr and it will last for two years.”
- “The current price cap is £1971/yr rate at typical use and was due to rise to £3549 (and likely £5400 in January). It was £1277/yr last winter.
- “This will be a cap on standing charges and unit rates, so use less you pay less, use more you pay more … There is not total cap on what you pay, the typical rate is just a figure for illustration.”
- “The new lower price cap includes getting rid of the green levies.”
- “The £400 payment to all homes … will continue”
- “That will take the average payment to £2100/yr”
- “To estimate what you’ll pay, over a year, multiply current costs by 6.5% (each £100 becomes £106.50) this includes the £400 discount (but not other payments).”
- “For those with lower than typical bills, the % increase will be lower, for higher users (as the £400 payment is flat regardless of use, so has a bigger proportionate reduction on lower usage)”
- “The £650 payments to those on many benefits will continue”
- “As will the £150 to those with disabilities and £300 to pensioners.”
- “There’s no announcement on whether these payments will be in place next winter, I expect the political reality is at least for benefits recipients, similar will be paid next year.”
- “VAT is not being reduced in this announcement, but there is a chance (50/50) I’d say that may happen in the Chancellor’s fiscal statement next week.”
- “For those on LPG and heating oil there I’m told there will be discretionary payments to help them too (awaiting details).”
- “For those in park homes and who pay landlords directly, I’m told they should benefit from the new business help (awaiting details).”
- “Those on fixes, can either stay on them, or leave and switch to the new state subsidised tariffs with no exit penalties.”
On the plan, Truss said: “Earlier this week I promised I would deal with the soaring energy prices, and today I am delivering on that promise.
“We are introducing a new energy price guarantee.
“It will give people more certainty. This guarantee means that from October 1 a typical household will pay no more than £2500 per year for the next two years.
“This will save a typical household around £1000 per year and it will be in addition to £400 worth of support from the Government.”
