Martin Lewis seeking 'urgent clarification' of energy bills for people on fixed rates

·Breaking News Editor, Yahoo News UK
·2 min read
Money Saving Expert's Martin Lewis during a joint press conference with Facebook at the Facebook headquarters in London.
Martin Lewis has warned there is still confusion as to how the price cap will be implemented for some.

People on fixed rate tariffs could still end up paying more than the energy price cap, Martin Lewis has warned.

The founder of MoneySavingExpert.com has become one of the most authoritative voices for people trying to save money on their bills amid the cost-of-living crisis.

On Thursday, Liz Truss announced that the government will freeze the price cap that sets domestic energy bills from 1 October, meaning the typical home will pay around £2,500.

The guarantee is a maximum price per unit of gas and electricity, so households that consume more than the average will see their bills higher than that.

The guarantee on energy costs will be funded by increased borrowing after Truss rejected calls for a windfall tax on oil and gas producers.

But there has been uncertainty surrounding those who have already agreed to a fixed rate with their energy companies, meaning they could end up paying more than the government subsidised rate.

Prime Minister Liz Truss reading a tribute out in the House of Commons, London following the death of Queen Elizabeth II on Thursday. Picture date: Friday September 9, 2022.
Truss announced that the government will freeze domestic energy bills at around £2,500 as part of a package to ease the cost-of-living crisis. (PA)

On Monday, the new 1 October price guarantee average direct debit rates were announced, putting the electricity unit rate at 34.00p per kWh and the gas unit rate at 10.30p per kWh.

The standing charges will be 46.36p per day and 28.49p per day respectively.

These rates are an average, with different rates being set in different regions.

Watch: Truss sets out plan to shield households and firms from energy price crisis

Critically, they also only apply to homes on default standard tariffs, which account for around 85% of households.

Lewis warned that it was still unclear whether those on fixed tariffs would end up paying more or would get their bills reduced.

"The rates... will also likely be a few % higher for those who pay by direct debit or on receipt of bills," he tweeted on Monday.

"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.

"We're trying to get the details & when we do I'll tweet & we'll put them in our calc which u can use to see your actual change."

The energy regulator Ofgem has said it will continue to announce the cap on household energy prices, despite the government's promise of lower bills.

Ofgem said that it plans to still make the announcements every three months, as it continues to regulate how much energy suppliers can charge for their services.

Suppliers will then submit part of their regulated bill to each household, and the remainder to the Government.