The Prime Minister has announced on Thursday that the typical households will now pay no more than £2,500 a year on gas and electricity bills from 1 October which will save £1,000 a year.
The new price guarantee will last for two years in addition to the £400 which was pledged by the former Chancellor Rishi Sunak.
Businesses will be provided with a six month scheme and public sector companies over the winter, but no specific figure has been provided as yet, and there is no energy price cap on them due to the differences in how the market operates.
Liz Truss said, “Earlier this week I promised I would deal with the soaring energy prices faced by families and businesses across the UK – and today I am delivering on this promise.
“This government is moving immediately to introduce an Energy Price Guarantee.”
She added, this will help to “curb inflation and boost growth.”
Truss told MPs in the House of Commons, “this is the moment to be bold” as she lays out her plans to offer support in the wake of soaring energy prices.
She added, “We are facing a global energy crisis and there are no cost free options.
“There will be a cost to this intervention.”
Alastair Douglas, CEO of TotallyMoney, said, “Today, the new Prime Minister has announced a consumer energy price guarantee of £2,500 for a typical household for two years.
“This is a big move. Although very welcome, it makes it all the more frustrating that we have had to endure a summer of uncertainty and worry because of a political process.
“However, even a move such as this won’t be enough to protect the most vulnerable households from the impact of the cost-of-living crisis which goes further than just energy costs. Last winter the cap was £1,277 to put this into context.
TotallyMoney’s recent research with PwC found that 1 in 4 people in the UK would need to borrow to cover an unexpected £300 bill. The current economic reality is that under-served households will be grappling with even higher bills as we head into the winter months.
The government has taken action and the private sector should follow suit. TotallyMoney will continue to provide the financially under-served with the tools they need to navigate the current economic environment. We hope to see more businesses across the financial sector do more to help their customers.”