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Alahna Kindred & Sonia Sharma

Martin Lewis explains what Liz Truss' energy bills announcement means for households

Liz Truss has made a major announcement on energy bills to help people struggling with the cost of living - now consumer campaigner Martin Lewis has explained what it all means for households.

On Thursday, the new Prime Minister said there would be a new cap on energy bills at £2,500 for two years, in addition to the £400 discount in place. The Ofgem price cap is currently £1,971 for someone on a default tariff who pays by direct debit - but this is set to rise to £3,549 in October.

She said the new measure would save the average household £1,000 a year. Now Mr Lewis has summarised what this means for British households - listing the 15 key takeaways from the PM's plan.

Read More: Everything you need to know about the Government's energy support package

The MoneySavingExpert founder appeared on the BBC Radio 4 Today Programme on Thursday morning to highlight those who are not covered by the Ofgem price cap. For example, the price cap doesn’t apply to people in Northern Ireland, or those who use heating oil. Renters could also fall under the cracks, if they pay their energy directly to their landlord, and people in park homes are also not normally in charge of their gas and electricity bills.

The Government has yet to announce full details of the energy help to come, so it isn't clear just yet what it will mean for every household, reports The Mirror.

“This helps every household in England, Scotland and Wales who pays a gas and electricity bill,” said Martin. “Those in Northern Ireland have different energy firms, different regulatory structures.

“Those who have LPG or heating oil - many in rural areas and have seen substantial rises - are not covered by the price cap. We also need to make sure the benefits of this policy go to those who pay landlords for energy bills, students who’ve been locked into high prices in anticipation of these rises - because these are people who pay their landlord directly, not an energy company. Those with communal heating contracts, those living in park homes.”

He added: “There is a big question about those, who - understandable - have chosen to fix their bills, often at higher levels than the price cap to forestall future rises. People have made a legitimate choice to fix their bills.

“What I would call for as a bare minimum is, anyone on a fix should be allowed by every energy company to switch to the state subsidised energy tariff without any exit penalties.”

The price cap sets a limit on the rates a supplier can charge for each unit of gas and electricity you use, as well as the daily standing charge. It currently covers around 24 million households.

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