Martin Lewis explains what the price cap increase means for you

Ofgem has confirmed an 80.06% rise in the energy price cap, sending the average household's yearly bill from £1,971 to £3,549 from October.

The cap will come into effect for around 24 million households in England, Scotland and Wales on default energy tariffs on October 1, and will remain in place until December 31, when it will be adjusted again.

Martin Lewis is here to explain what the announcement means for your energy bills and to offer his advice.

Martin said, “There is a cap on the standing charge which is the daily charge you pay for having gas, and or electricity, and there is a cap on the unit rate you pay, so the amount that you use.

"The typical figure that’s being given - the rise from £1,971 to £3,549 - is actually just an illustration. That’s not the most you can pay, you could pay £10,000 as some with disabilities and some who need electrical equipment, and the rates can be far far higher for some.

"[That figure] is just based on typical use, so for those that are on companies standard tariffs… and you’ll be seeing a rise of 80% compared to what you’re paying now, but that does vary by region and by your usage”

Martin went on, “I’m sorry to say, but it’s far worse than that… the cap used to move every six months, but this October price cap will not last until April, it will only last until the 1st January.

"Now the price cap on the 1st January, we are seven months through a ten month assessment period, so we have a pretty good idea of what will happen then, and I hate saying this. I genuinely don’t want to be the person saying this, but I’m going to because that’s what I think… 

"On the 1st January we are currently expecting to see the price cap rise another 51% on top of the 80%... which will take somebody on typical use to over £5,300 a year, pro rata. We are talking over half the state pension, even more than what somebody on universal credit gets… I mean it's clearly unaffordable.

"It is irresponsible of our government to allow today’s announcement to come without firm plans in place for what they are going to do to help the most vulnerable, some of whom are at risk of dying. And to help many on lower and middle incomes who’s lifestyles will be substantially curtailed by this energy rise.

"We have to hear soon - Liz, Rishi - if you are watching, and you should’ve done it before, but on 5th September you need to tell us what help people are getting. The mental health impact of this is devastating…”