Martin Lewis has explained why some households' energy bills could exceed the £2,500 price cap coming into force next week.
The Money Saving Expert appeared on This Morning to offer further clarification on the bill freeze, as families across the nation are worried they’ll struggle to manage amid the cost-of-living crisis.
Prime Minister Liz Truss ’ flagship energy plan confirmed that bills would be frozen at £2,500 to soften the blow on energy customers in the UK.
But some Brits are not entirely sure what this means, and how the bill freeze will affect the amount they spend on energy per year.
A This Morning viewer named Louise called the show to ask why she had been quoted £5,000 after the price freeze.
Martin said the prize freeze has been "misused in some places" and explained why some people could be hit with bills that exceed the average £2,500.
He said: "That £2,500 is an illustration of what the price cap would be for someone on typical use.
“What's actually capped is the standing charge, the amount you pay per day, and the unit rate, which is the amount you pay for each unit of electricity and gas you use.
"If you use more, then you pay more. If you use less then you pay less. So the idea your bill can't go up to £5,000 is nonsense. If you use a lot and that would be a lot then it could go up to £5,000."
However, Martin did admit that Louise's bills seemed unusually high and suggested that this could be a result of her being in energy debt or recently coming off a cheap fix.
He advised Louise to contact her provider to investigate further.
While Liz Truss’ Energy Price Guarantee is based on unit prices, and will result in higher bills for households who use lots of energy, there is still some help on the way.
The Government's promise for a £400 flat payment to reduce every household energy bill this winter will still go ahead, and is set to be released to millions from next week.
All households will benefit from the payment in some way, but those with low energy usage will benefit the most.
But while the bill freeze is promised until 2024, the Government are yet to confirm whether the £400 payment will be made next winter.
Truss’ scheme means that Ofgem’s planned October price cap increase, which would’ve seen average yearly energy bills reach £3,549, has been avoided.
Households will start receiving £400 off their energy bills from next week, and it’ll be paid in six instalments.
A discount of £66 will be applied to bills from October and November, rising to £67 each month from December until March 2023.
