Money expert Martin Lewis has been looking at the pros and cons of the reported Government plans to freeze energy bills. New Prime Minister Liz Truss is expected to outline her plans on how to help reduce energy costs for millions of households across the UK this week.
It has been reported that those plans will include a freeze on energy bill prices to deal with the cost of living crisis. The Prime Minister is expected to announce a plan to freeze domestic bills in England, Scotland and Wales at around £2,500 - some £500 higher than the current cap but £1,000 below the level they are expected to hit in October and many thousands below rises predicted over the next six months.
A plan experts think would cost between £90billion and £130billion. It is thought Ms Truss will allow energy companies to borrow with government-backed loans to fund the subsidy. But it's not known whether the money will be repaid by homeowners through their energy bills or their taxes.
Read next: The options for Liz Truss to help your energy bills – and how likely they are
MoneySavingExpert founder Martin said any freezing of energy bills would be a big help - but admitted more targeted help might be needed.
He has given his "rough provisional analysis of what may be coming", saying that freezing the price cap would help "substantially". Freezing the price cap at its current level would be a "sigh of relief for many", he said. But added that the cost of this scheme would need to be paid back, and may not give enough help for those really struggling.
He said: "The big benefit, and problem, of this is (almost) everyone gets it, And those who gain the most from it in cash terms will be those with the highest bills (many, though not all, will be at higher income levels), so clearly it isn't targeted at helping those who need it most."
Martin also pointed out that many energy users may have locked in to fixed rate deals - and may not benefit from the price cap freezing. This price cap is due to rise to £3,549 in October.
Because of this, up to 15% of households have taken out fixed rate deals higher than the current price cap, thinking it would save them money in the long run.
Martin said: "So what happens? Will they automatically be put on the price freeze? If they are not automatically moved, will they be allowed to switch to the price freeze?"
He later added on Twitter: "Have you applied to fix your energy bills in the last 14 days? If so you're within the cooling off period. As there are rumoured big changes coming [on Thursday], be prepared to cancel if you still can."
The MoneySavingExpert boss also noted that even freezing at the current price cap still means really high bills.
He said: "We're freezing at the current level, but that is already high. If we freeze now, we have already seen the price cap rise 50%, so we're freezing at a high level (and higher than some other countries have)."
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