Martin Lewis has issued new advice ahead of the Energy Price Guarantee in October, including "need-to-knows".
With the Energy Price Guarantee coming into effect on October 1, households across Scotland and the UK will be looking for ways to save as much money as possible on their bills.
The MoneySavingExpert founder took to Twitter on Wednesday to share an update on all of the important information that people "must know".
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Lewis tweeted: "NEW: My 16 must knows about the new 1 Oct price guarantee. Full info inc what you'll pay calc, how it impacts those on fixes, what we know (or don't) about LPG/oil, Northern Ireland and much more. Pls share."
While the MoneySavingExpert webpage Lewis shared includes a total of 16 "need-to-knows", here is a rundown of some of the most important points.
The full list can be found on the MoneySavingExpert site here.
1. On October 1, the current price cap will be replaced with a 'price guarantee rate' that will be around 27 per cent higher
The new rate will last for two years and is set to take average yearly household bills from £1,971 to £2,500.
Lewis wrote: "I've seen a lot of confusion, so let me start by saying there's NO MAXIMUM ENERGY BILL.
"Instead, standard tariffs in England, Scotland & Wales (roughly 85% of homes are on these) have a maximum daily fee and cost per energy unit that providers can charge.
"The quoted rates many media outlets use are just an illustration of the impact of these caps for someone with typical use (they should state that) so USE MORE, YOU PAY MORE; USE LESS, YOU PAY LESS. I prefer to instead lead on the rough percentage change."
2. There will still be a £400 energy bill rebate
Following the UK Government's announcement of the Energy Price Guarantee to limit the impact of rising energy costs, all UK households will still get the previously announced £400 energy rebate.
Lewis said: "Factor this £400 in, and the price guarantee rise over the current cap is an average 6.5% (£2,100/yr on typical use).
"Though as the £400 is the same for all, those with low usage could actually see a reduction in the total paid compared to the current rate.
"In practice you will either receive, or get your bill reduced by, £66 or £67 each month from Oct 2022 to Mar 2023."
He added: "However, while the price guarantee rate is promised to last two years, there is no news on whether the £400 payment will be made next winter. If not, then in practice costs for winter 2023/24 will rise."
3. The price guarantee is still a cap on standing charges and unit rates
Earlier this week, Lewis unveiled an online calculator that can be used to estimate how much your bills will increase by.
Today, he shared the "average dual-fuel direct debit rates for the new energy price guarantee" beginning October 1, as well as how they compare to current rates and what they would have been under the previously announced price cap.
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Electricity
Unit rate: 34.0p/kWh (currently 28.3p, was due to be 51.89p)
Standing charge: 46.4p/day (currently 45.3p, was due to be 46.4p)
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Gas
Unit rate: 10.3p/kWh (currently 7.4p, was due to be 14.76p)
Standing charge: 28.5p/day (currently 27.2p, was due to be 28.5p)
4. Hold off if you are fixed
Lewis said that those who are on a fixed deal do not "need to do anything until things are firmed up" and that they should not call energy firms as they "don't know yet".
He explained: "It looks like the enormous majority of those on fixes will either be automatically paying less than the new price guarantee, or will see their fixed costs reduced to be the same level as it (so effectively are moved to a price guarantee tariff)."
5. Extra benefit payments will continue
Lewis stated that the previously announced one-off cost of living payments will still be delivered.
These include the £650 cost of living payment that is being delivered in two parts, the one-off £150 disability payment to those claiming certain disability benefits, and the £300 that will be paid to pensioners on top of the Winter Fuel Payment.
6. You will pay £273 per year even if you use no energy
Lewis explained: "You pay for having access to energy even if you don't use it. The daily standing charges rose hugely in April, and will rise a touch in October. If you've both gas and electricity, the average direct debit standing charge is £273/yr before you use owt."
7. There may be help if you're going to struggle to pay your bills
Lewis advised that those who are currently struggling financially, or expect to be this winter, should reach out to their energy company and explain that they are "vulnerable".
Additionally, there are hardship and debt grants from energy suppliers.
8. You can make savings outside of your energy use
While Lewis shared some energy saving tips to help keep energy bills as low as possible, he also stated: "Of course, those who have already cut to the bone won't be able to do any more, but many others should see this as a clarion call to check all your outgoings."
He advised that households with a collective income of under £40,000 should do a 10-min benefits eligibility check.
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