The government’s new Energy Price Guarantee, which applies from 1 October, will replace the £1,971 cap that currently applies and will freeze bills at £2,500.
However, the government’s plan only caps the cost per unit that households pay, meaning actual bills will still be determined by how much energy is consumed.
The consumer saving is based on usage, meaning if households use more energy they could end up paying more than £2,500.
What did Martin Lewis say?
Mr Lewis has repeatedly warned that there is no cap on energy bills from October and the limit is not £2,500.
He clarified that the cap is actually on the standing charges and the unit rates for gas and electricity, meaning if you use more energy, you will pay more.
Mr Lewis reiterated this point following Liz Truss’ round of media interviews on Thursday (29 September) in which she repeatedly spoke about the energy price guarantee limiting the average bill to £2,500.
The money saving expert said that communicating there is a price cap is “risky” because some people may mistakenly think they can leave the heating on all the time in winter without being charged more than £2,500.
In a tweet posted on Thursday, he wrote: “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.”
In another tweet, he added: “THERE IS NO £2,500 CAP ON ENERGY BILLS.
"Instead the new 1 Oct guarantee, like the old caps, limits - Daily charge (28p gas, 46p elec) - & Unit rates (10p/kWh gas, 34p/kWh elec).
"So use more, pay more. £2,500 is just what someone with avg use’d pay."
Mr Lewis later clarified how the energy price guarantee will work on ITV’s Good Morning Britain, and stressed that the more energy people use the more they will pay.
He said: “There is "no cap of £2,500 on what you can pay on energy bills. What there is, is a cap on standing charges, which is a daily charge you pay and the unit rate - how much you pay for each unit of gas and electricity you use - that’s what’s capped."
The £2,500 figure is based on what the energy regulator Ofgem calculates as the "typical " bill, “but if you use more you’ll pay more," he added.
"It’s a cap on your unit rates. It limits how much you pay on each unit of gas and electricity. It is not a cap on total costs.
"The old price cap wasn’t, and the new guarantee, which is effectively a two-year long price cap, isn’t either.
Mr Lewis said it was a "miscommunication" for the Prime Minister to say that it was an overall cap on bills.
Truss urged to ‘publicly clarify’ statements
Ms Truss has been urged to publicly correct her statements that “nobody” will pay more than £2,500 for their annual energy bill following a round of interviews on Thursday.
Although she initially described the figure as being for a “typical” bill during an interview with BBC Radio Nottingham, she went on to say: “The biggest part of the package we announced is the support on energy bills, making sure that people across this country are not facing energy bills of more than £2,500 and that businesses can get through this winter.”
On BBC Radio Kent, she stated: “We have taken action by the government stepping in and making sure that nobody is paying fuel bills of more than £2,500.”
She went on to repeat the claim on BBC Radio Leeds, stating: “The action we’ve taken on energy bills will mean that Leeds and other people in West Yorkshire aren’t going to be facing energy bills of £6,000 which is what was forecast, they’re going to be, through the energy price guarantee, the maximum will be £2,500.”
According to government figures, the typical bill for a detached house under the price freeze will be £3,330, £2,650 for a typical semi-detached house and £1,750 for someone living in a purpose-built flat.
Fact checking charity Full Fact said it wrote to Ms Truss on Wednesday to stress that “it is vital the public have accurate information about energy bills in the context of the ongoing cost-of-living crisis”.
Full Fact chief executive Will Moy said: “We wrote to the Prime Minister about getting this wrong only yesterday. The government’s energy plans will affect every household in Britain this winter. And yet Liz Truss has repeatedly misled listeners this morning.
“She must now publicly correct her mistake to make sure people are not misled about their energy prices and hit with unexpected and unaffordable energy bills this winter.”