Martin Lewis has confirmed the energy price rates that will be in effect from this October. The money-saving expert took to Twitter to inform people about the new prices due to affect millions of homes and families.
He said electricity standing charges would be 46.36p per day and 28.49p per day for gas as Liz Truss announced a freeze on bills for the next two years. In a statement, the Prime Minister said the Ofgem price cap will be replaced with a "two-year energy price guarantee", Birmingham Live reports.
This would mean a typical UK household will pay no more than £2,500 a year (equivalent to £208.33 a month) on bills for two years from October 1. The price cap had been set to rise far higher than that, to £3,582 (£298.50 a month) in October, £4,266 (£355.50 a month) in January, and then to almost £4,427 (£368.91 a month) in April 2023.
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Ms Truss said it would save the typical family £1,000 a year and comes on top of the £400 energy rebate being delivered over six months from October. The guarantee on energy costs, which is aimed at saving families and businesses from financial ruin if bills continue to rise as predicted, will be funded by increased borrowing after Ms Truss rejected calls for a windfall tax on oil and gas producers because it would harm business growth.
Following the Government announcement, the impact on tariffs is being calculated and MoneySavingExpert founder Martin Lewis has issued some figures on social media. He said today that the new October 1 price guarantee average direct debit rates would be:
Electricity
Unit rate: 34.00p per kWh
Standing charge: 46.36p per day.
Gas
Unit rate: 10.30p per kWh
Standing charge: 28.49p per day
So how will my bills change?
Mr Lewis cautioned: "These rates only apply to homes on default standard tariffs (about 85 per cent of homes). Fixes that cost more than the new price guarantee will also likely see their rates reduced. But we are still waiting for clarification on how and what happens to those on cheaper fixes.
"This is just an average, rates are set by region. They will also likely be a few per cent higher for those who use prepay or pay on receipt of bills."
He says people on fixed tariffs that are less than the new price guarantee figures will be able to stay on those deals but it's not yet clear if the low rates they have secured will be allowed to stay the same.
Householders are also advised that while the energy price guarantee limits the amount households can be charged per unit of gas or electricity, your exact bill will continue to depend on how much energy you use. So it could be higher than £2,500 per year if you use a lot of energy in your home. For households in England, Scotland, and Wales who pay for their gas and electricity through monthly, quarterly or other regular bills, the new price guarantee will be applied when your bill is calculated.
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