Energy comparison site Uswitch said many will still be 'facing an extremely difficult winter' despite a plan to shield households from the price crisis

Energy comparison site USwitch said consumers were 'not out of the woods' over energy prices despite new Prime Minister Liz Truss setting out a plan to shield households and firms from the crisis. Energy bills for the average household will be frozen at no more than £2,500 and businesses will be spared crippling increases.

The Prime Minister’s two-year plan paid for by tens of billions of pounds of borrowing will save the typical household around £1,000 from October and protect billpayers from further expected rises over the coming months. For businesses and other non-domestic users such as schools and hospitals, which have not been covered by the existing price cap, a six-month scheme will offer equivalent support.

However Uswitch.com said households could still end up paying on average £237 more for energy over the three coldest months than they did last year - in addition to increases in the cost of fuel and other bills.

Justina Miltienyte, head of policy at Uswitch.com, said: "After endless reports of ever-increasing price predictions, consumers will be breathing a sigh of relief. Finally there’s a plan that removes the uncertainty of quarterly price increases and goes some way towards giving people the reassurances they need to get through the winter.

“But amid the solace, it’s important to remember that we are not out of the woods yet. Even if rates are not as high as they were going to be, households will still be facing an extremely difficult winter. Taking into account the £400 energy bill support, households could pay on average £237 more for energy over the three coldest months than they did last year - on top of hikes across other essentials such as food and fuel.

“It’s important to remember that bills are not frozen. This is a cap on the unit rate of the energy you use - it is not a cap on your final bill. The less energy you use, the less you will pay, so you may still be able to save money by managing your energy usage this winter.

“This help, while much-needed, is unaffordable to sustain. The longer we have to rely on Government support to keep prices down, the higher the final bill will be for taxpayers for years, if not decades, to come.

“With the pressure lifted for this winter, we welcome the announcement of an energy supply task force that must now sort out the structural problems of the wholesale energy market and how it interacts with the blunt price cap mechanism.

“Reforming the wholesale market goes hand-in-hand with reducing our dependence on non-renewable energy. Electricity prices can no longer be dictated by fossil fuels, especially gas, and it’s good to see a commitment to more quickly let customers benefit from the lower prices generated by renewables.

“Removing gas dependency would also protect households from a repeat of the most aggressive price shocks. The Government has made a start towards tackling the energy crisis, but now needs to work out how to make sure this never happens again."

The Government's plan will see it limited the price suppliers can charge customers for units of gas, replacing the existing price cap set by regulator Ofgem. Ministers will provide energy suppliers with the difference between the new, lower price and what they would charge were this not in place.

The Prime Minister told MPs: “This is the moment to be bold. We are facing a global energy crisis and there are no cost-free options.”

Downing Street has refused to put a cost on the programme, previously estimated to cost up to £150 billion. The Prime Minister’s official spokesman would only say the price will be “tens of billions”.