Martin Lewis' round-up of the new £2,500 energy price cap – here's what's happening

New energy price guarantee – 15 quick need-to-knows for consumers

Martin Lewis, founder of MoneySavingExpert.com, said: "On the back of a prior briefing and the announcement in Parliament, here is my very quickly bashed out summary of the new energy price freeze.

1. The new price guarantee starts 1 October, and for someone on typical use will be £2,500 a year and it will last for two years.

2. The current price cap is £1,971 a year at typical use, and was due to rise to £3,549 a year (and likely £5,400 a year in January). It was £1,277 a year last winter.

3. This will be a cap on standing charges and unit rates, so use less, you pay less, use more, pay more (I'll publish the rates when I have them). There is no total cap on what you pay, the typical rate is just a figure for illustration.

4. The new lower price cap includes getting rid of the green levies.

5. The £400 payment to all homes (paid as £66 a month over winter) will continue.

6. That will take the average payment to £2,100 a year.

7. To estimate what you'll pay, over a year, multiply current costs by 6.5% (each £100 becomes £106.50). This includes the £400 discount (but not other payments).

8. For those with lower than typical bills, the % increase will be lower, for higher users higher (as the £400 payment is flat regardless of use, so has a bigger proportionate reduction on lower usage).

9. The £650 payments to those on many benefits will continue (half's already been paid).

10. As will the £150 to those with disabilities and £300 to pensioners.

11. There's no announcement on whether these payments will be in place next winter, I suspect the political reality is, at least for benefit recipients, similar will be paid next year.

12. VAT is not being reduced in this announcement, but there is a chance (50-50 I'd say) that may happen in the Chancellor's fiscal statement next week

13. For those on LPG and heating oil, I'm told there will be discretionary payments to help them too (awaiting details).

14. For those in park homes and who pay landlords directly, I'm told they should benefit from the new business help (awaiting details).

15. Since the announcement, I have heard the discount that is being applied to the price-capped tariffs is likely to be applied to all tariffs, including fixes (the new 'price guarantee' will effectively work as a per pound discount off the unit rates of the pre-planned 1 October price cap rate). If this is correct, many fixes that currently look costlier than the price guarantee will end up cheaper. Earlier, the information I was told by the Government was that "all can get out of a fixed tariff without exit penalties". This may have changed, so that it is left up to firms. I will confirm when I know, but be careful acting on any of this before it is cast iron.

"I'm being told there will be legislation, so similar will apply in Northern Ireland.

"However, it's important to note that on the energy price guarantee, the fine print of the policy (eg, unit rates), exact rules on fixes, LPG, Northern Ireland etc is still being finalised. So be careful making decisions based on it yet. I will update our info when we get it."