Martin Lewis calls for exit fees on fixed-rate energy deals to be scrapped

Martin Lewis has called for people to be allowed to exit their fixed rate energy tariffs without being penalised as Liz Truss announced a price freeze on bills.

Truss unveiled a plan that will freeze domestic energy bills at around £2,500 as part of a package to ease the cost-of-living crisis.

The guarantee on energy costs, which is aimed at saving families from financial ruin if bills continue to rise as predicted, will be funded by increased borrowing after Truss rejected calls for a windfall tax on oil and gas producers.

The freeze will only affect those on a variable rate, which currently means around 80% of the population.

But many households will have already agreed to a fixed rate with their energy companies in the hope of not having to pay even more if the price cap is raised again – meaning they could be locked into contracts paying more than the government subsidised rate.

Lewis told BBC Radio 4: "I very much welcome the plans that are being rumoured to come out today. They are not perfect – then again, I've not seen any solution which is perfect.

Read more: New PM's term in office to be marked by deepest living standards squeeze in a century

"They will mean millions, if not tens of millions of people will breathe a sigh of relief that they will be able to afford their energy bills this winter"

The Money Saving Expert said such a radical change in policy should be taken into account by energy companies, and people should not be punished for getting a fairer deal.

"It's important to remember this is such an important shift in policy, not just from the Boris Johnson administration, but from what we were hearing during the campaign itself," he told broadcasters.

"It was very difficult to predict – I'm not sure anyone in the Conservative Party would have predicted such a switch. Again I welcome it, but it does mean that people have made a legitimate choice to fix their bills.

Read more: Liz Truss's energy bills freeze - What does it mean for me?

"They should be allowed to do that without any exit penalty fees."

Truss told the Commons: “This government is moving immediately to introduce a new energy price guarantee that will give people certainty on energy bills, it will curb inflation and boost growth.

“This guarantee, which includes a temporary suspension of green levies, means that from October 1 a typical household will pay no more than £2,500 per year for each of the next two years while we get the energy market back on track.

“This will save a typical household £1,000 a year. It comes in addition to the £400 energy bills support scheme. This guarantee supersedes the Ofgem price cap and has been agreed with energy retailers.”

She also told MPs: “We will also support all businesses, charities and public sector organisations with their energy costs this winter offering an equivalent guarantee for six months.

“After those six months, we will provide further support to vulnerable sectors such as hospitality, including our local pubs.”

Truss said the business secretary will work with business to review where the additional would be targeted, saying the review will be concluded within three months “giving businesses certainty”.

“In the meantime, companies with the wherewithal need to be looking for ways they can improve energy efficiency and increase direct energy generation,” the MP said.

Earlier on Thursday, levelling up secretary Simon Clarke said the government's energy support package is designed to provide users with certainty.

"We are not looking here at sticking plaster solutions," he said. "We want a lasting settlement that provides both comfort and clarity for both households and businesses.

"This is a major attempt to draw a line and provide energy certainty for everybody in this country about energy usage in the medium term."