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

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

Can you guess what the answer is?

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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

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".'

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

We hear you Martin!