Following the news that the energy price cap is set to go up next month, money whizz Martin Lewis has swooped in to explain exactly what it all means for your bank account.
In case you forgot, the price cap is the maximum amount providers can charge per unit of electricity and gas, serving as a guide for them.
The previous cap of £1,568 is going up by roughly 10 percent to £1,717 from 1 October to the end of the year.
These numbers don't necessarily mean that you can't pay more than this for energy though, it's instead based on a 'typical' UK house that pays their electricity and gas through direct debit, and what they would expect to pay in a year.
Advert
Regardless, the increase of the cap means that almost all of us will be paying more for our bills - but what can we do to limit this?
Enter Martin Lewis (who else), the man known as the Money Saving Expert, who has come to the rescue with an explanation on things to look out for and what you could do to help to ease the stress on your bank balance.
He's laid it all out in a video posted to X, speaking about his thoughts, while his website Money Saving Expert has also provided a number of tips.
Advert
In the video, he said there was a 'moral hazard' around the energy price standing charge, which is basically the amount of money you pay so you can access your gas and electricity.
Further assessing the changes, he outlined how much you can expect to pay per day for electricity and gas, regardless of how much you use, and the figure is shocking.
Described as a 'poll tax on energy bills', Lewis revealed you'd be forking out 60.99p a day for electricity and 31.66p a day, which works out at over £330 a year.
He highlighted: "You're going to pay £334-odd a year just for the facility of having gas and electricity meters, even if you don't use them.
Advert
"Many people don't use gas in summer, but pay 32p a day just for that facility."
The cap rise means that the figure will increase to about £338 per year, with the money expert reiterating that it 'penalises lower users, often many who are vulnerable, and means they will face a proportionately larger rise'.
So, it doesn't matter how careful you want to be with your energy consumption, this payment will be the minimum that comes out of your pocket every year.
Advert
Lewis also offered some advice to those who might struggle to deal with the cap rise.
The money man advised on getting a fixed rate now so that you won't get hit with other potential future price rises, though it may be more than what you are paying now.
Popular energy providers such as OVO, British Gas, E.on and Octopus Energy offer fixed rates that will be lower than those coming in October, so you'd basically be suffering a bit in the short-term to benefit in the long-term.
He's urged Brits to do it as it's 'safer' to do now before waiting until the price cap increase to act.
Topics: Cost of Living, Money, Martin Lewis, UK News
Joshua Nair