Energy bills calculator: Martin Lewis shares handy tip on how to calculate new energy cost after Liz Truss's announcement

Martin Lewis has shared a handy tip on how to quickly work out your new energy bill following the announcement from Liz Truss.

The Prime Minister announced that energy bills for the average household will be frozen at no more than £2,500 and businesses will be spared crippling increases.

The plan will see the Government limit the price suppliers can charge customers for units of gas, replacing the existing price cap set by regulator Ofgem.

Using tens of billions of extra borrowing, the Government will provide energy suppliers with the difference between the new, lower price and what they would charge were this not in place.

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Energy announcement: Liz Truss announces price cap will be fixed at £2500 a year...

The £2,500 “energy price guarantee” will apply in England, Scotland and Wales from October 1, with the same level of support made available to Northern Ireland, which has a separate energy market.

The guarantee is based on the existing cap, plus the already promised £400 energy bills discount for all households, meaning costs will be similar to those faced today.

Money Saving Expert and TV host Martin Lewis has shared a handy tip on how to quickly work out the new energy costs for people in a bid to help them budget amid the cost of living crisis.

Martin Lewis shared the handy tip

Taking to social media, Lewis told his 1.7 million followers to work out their new bill over the year, multiply the current cost of energy bills by 6.5% – which includes the £400 discount (paid off as £66 a month) but not other payments.

This only helps calculate the average increase but Lewis added that the cap on standing charges and unit rates will also mean that those who use lower amounts of energy will likely see lower bills than a 6.5% increases with Lewis adding “For those with lower than typical bills, the percentage increase will be lower”

Lewis added that “Those on fixes, can either stay on them, or can leave and switch to the new state subsidised tariffs with no exit penalties."

Liz Truss said she would not “give in” to calls for a larger windfall tax to fund her energy support package.

Sir Keir Starmer said under Labour’s plan there would be “not a penny more on bills”, but under the Prime Minister’s plan there would be a “price rise”.