Martin Lewis’ energy price cap warning – you could be paying far more than £1,179 a year

If you are on a standard tariff, don't assume what you'll pay

Our favourite Money Saving Expert posed this money teaser on the new series of ITV's Martin Lewis Money Show last night. 'If you are on a standard tariff with the current energy price cap of £1,179 a year, what's the most you could be expected to pay?'

A. £1,179

B. 10 per cent above £1,179

C. There's no limit

english journalist martin lewis

(Image credit: Ben A. Pruchnie/Stringer/Getty Images)

Can you guess what the answer is?

Related: Why Martin Lewis is sceptical about new rules that promise to free 1,000s of mortgage prisoners

Well, the answer is C, there's no limit. Did you get it right?

The energy price cap explained

Co-host Angellica Bell points out what we are all thinking – that surely there should be a limit if it's called a price cap.

But Martin explains. 'It's called a price cap, but it's really a rate cap. That £1,179 a year figure is the cap for someone on what's defined as "typical usage", but if your usage is higher your cap is higher. If your usage is lower, your cap is lower.'

'There are actually regional variations, and a totally different cap if you are on a prepayment meter.'

Why now is a good time to switch

houde interior with white wall window and plant pot

(Image credit: Future PLC/ David Parmiter)

Martin will be going into energy tariffs in next week's show, but he does point out that right now, the big six energy suppliers, including British Gas, EDF and Scottish Power, have far cheaper tariffs that the standard tariffs available. The cheapest I've seen for a couple of years.

'Now you can't ask to switch to them – you have to do this via a comparison site. However, existing customers are allowed to do it,' Martin says.

'So if you're one of those people that always says, "I don't want to switch firms", well I'm getting messages from people saying, "Thanks for telling me, I've just moved from British Gas to British Gas and paid £400 less a year".'

Related: The Martin Lewis Money Show – Martin warns you only have five days to open a Help to Buy ISA

'But we don't know how long those are going to last so get on it quick.'

We hear you Martin!

Amy Lockwood
Sleep Editor

 

Amy is Ideal Home’s Sleep Editor. She’s spent the last three years researching and testing all things sleep for our audiences whether that’s sorting the wheat from the chaff in our hunt for the best mattress or learning about materials to uncover the best duvet for various sleep needs. She also lends her expertise to our furniture guides, sharing her design knowledge with our readers to help them choose the right sofa for their interior or the best garden furniture for their outside space.