Martin Lewis warns you could pay more than £2,500 guarantee in vital energy bill alert | Personal Finance | Finance

The financial journalist is referring to the Government’s £2,500 energy price guarantee, which was announced earlier this month. Introduced to mitigate the unprecedented rise in energy bills, the price guarantee limits the amount a household can be charged per unit of gas or electricity. Appearing on Good Morning Britain earlier today, Martin Lewis blasted the “miscommunication” over the Government intervention and explained why there is no set £2,500 on overall energy costs.

GMB host Susanna Reid cited Prime Minister Liz Truss’ speech earlier this month which claimed that “no family, no household is having to pay more than £2,500” on their bills as a result of the price guarantee.

Ms Reid asked Mr Lewis why one viewer has seen his gas and electricity bill go up from £3,000 to £5,000 despite this support.

He replied: “There is no £2,500 in any figures that has any meaning to anybody. There is no cap of £2.500 on what you can pay on energy bills.

Explaining what the guarantee actually means, he said: “What there is, is there is a cap on the standing charges, the daily charging pay, and the unit rates how much you pay for each unit of gas and electricity you use.

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“That’s what’s capped. The £2,500 figure is what someone on what the Ofgem noted typical use would pay on that cap.

“But if you use more, you will pay more. It is a cap on your unit rates, it limits how much you pay for each unit of gas electricity. It is not a cap on total costs.

“The old price cap wasn’t and the new price guarantee, which is effectively a two-year long price cap isn’t either and this new price cap is more expensive than the current one.”

Good Morning Britain is on ITV 1 weekdays from 6am to 9pm.

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Prior to the introduction of the energy price guarantee, Ofgem said the price cap would rise to £3,549 per year, for dual fuel for an average household.

While the Government’s latest support initiative offers a layer of protection to vulnerable people, the average household is still expected to see their energy bills rise by 27 percent come October 1.

On Twitter, Martin Lewis broke down the importance of clarifying the limitations of the energy price guarantee to the public.

He said: “The reason it is so important not to communicate that there is a £2,500 cap is it risks some people, possibly vulnerable elderly people, thinking they can keep the heat on max all winter, and they won’t pay more than a certain amount.”

Prepayment customers will also be affected by the introduction of the price guarantee on October 1.

Households with a prepayment meter will pay a unit rate of 10.63p per kWh and a standing charge of 37.51p per day for gas.

For electricity, the same households will see their bills averaged at a unit rate of 33.08p per kWh with a standing charge of 51.41p per day.

However, these rates and standing charges are averages, which differ depending on region and averages take into account VAT at five percent.