Martin Lewis labels Ofgem's new energy price cap 'meaningless' but still 'good news'

Martin Lewis has criticised the widespread news of the latest Ofgem price cap figures as "meaningless" in practical terms.

The regulator confirmed that the price cap will fall by 12.3 per cent for a typical dual-fuel household in England, Scotland, and Wales. This will bring the current cap of £1,928 to £1,690 - a drop of around £20 a month.

However, appearing on Good Morning Britain this morning (February 23), Martin explained why people shouldn't pay too much attention to the new price cap figure. He further explained what practical information people can take away from the announcement.

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The money-saving expert explained: "That £230 figure and that £1,690 a year figure...is completely meaningless and doesn't affect anybody, it's just a made-up figure based on typical usage. Also, because it's projected for a year, the price cap only lasts three months, so lets go back to basics, the amount you pay for gas and electricity will be dropping by an average, and it depends on region and how much you use, 12.3 per cent on the first of April.

"What does that mean in practice? For every £100 of energy you're paying at the moment, on the same usage you will pay £87.70 from the first of April and we're expecting it to drop again on the first of July but prices are now still double the prices we had before the price cap.

"But big picture, it is better news, good news I'd probably go as far as from the first of April what you pay for the same amount of energy will be cheaper."

Martin also explained that prepayment meters may become the cheapest way to pay for bills from April 1 as standing charges for gas and electricity have become standardised. He explained that