Users on fixed-rate tariffs will be able to exit their plans and switch to a variable rate following Liz Truss’ new energy support package, Martin Lewis has revealed.
Reacting to the announcement with a 15-point summary for consumers, the consumer champion said Jacob Rees-Mogg, the secretary of state, confirmed the change.
“Point 15 of this has not been said in parliament, but I’ve been told this directly by the Secretary of State for Business as its what I was arguing for,” Mr Lewis said.
“Those on fixes, can either stay on them, or can leave and switch to the new state subsidised tariffs with no exit penalties,” he added.
The new prime minister's plan includes preventing the average annual family bill in Britain soaring past £2,500 for two years from this autumn. But she also has included moves, some highly controversial, to prevent prices spiking again in the event of global events taking a similar downturn.
From 1 October, the average energy bill was set to rise to £3,549 when the price cap review came into place, before going as high as £7,700 by April 2023, with costs soaring largely due to Russian president Vladimir Putin's war in Ukraine.
The government's "energy price guarantee" will mean bills for the average household will go no higher than £2,500 at any point over the next two years.
It will save a typical home around £1,000 from 1 October, when the current consumer price cap had been set to soar, according to official estimates.
The prime minister's official spokesman has only said the cost of the support will be "tens of billions". Previous estimates have put the strategy at around £150 billion. Chancellor Kwasi Kwarteng is expected to give more specifics during his fiscal announcement later this month.
Ms Truss has refused to impose a windfall tax on the soaring profits of oil and gas giants, as called for by Labour. Instead, her plans will be paid through borrowing.
Ms Truss also suspended the £150 green levy on bills to pay for renewable alternatives, but officials said the programmes will not be scrapped but will in future be funded from general taxation.
As part of a “twin track” approach of keeping bills down and enhancing security of supply, she announced more than 100 new licences to drill for oil and gas and lifted the ban on fracking in the UK, despite warnings this will have little immediate impact on prices.
She set out the ambition of making the UK a net energy exporter by 2040. The new energy guarantee will set a cap on the unit price of energy, meaning that the actual bill paid by households will vary depending on gas and electricity use.
Officials estimate that the annual saving is likely to range from an average £650 for a well-insulated purpose-built flat - where typical bills will be cut from an expected £2,400 to £1,750 - to £1,400 for a detached home - where the cost will fall from an expected £3,800 to £2,650.
