Martin Lewis has issued a stern warning to all UK billpayers on a fixed-rate contract with regards to their energy. Taking to Twitter, the Money Saving Expert urged people on fixed-rate contracts to check if their energy rates had 'rocketed'.
In his Tweet, Martin detailed how the brand-new Ofgem price cap had been reintroduced on Saturday, meaning that the average annual bill was dropped from £2,500 to £2,074. Despite this, Martin explained that people could actually be paying more, with those who chose to lock into expensive fixed rates losing their 'Energy Price Guarantee' subsidy.
A number of UK billpayers last year locked into hyper-expensive fixed-rate deals before the Government unleashed its Energy Price Guarantee - likely as they were unsure of what was going to happen to future energy bills. Most of these price fixes sit far higher than the current cap of £2,074 - with The Mirror detailing how some likely went as high as a crippling £2,800.
Read more: Martin Lewis calls for end to 'morally hazardous' £300 energy charge
If this was the case, the Government's Energy Price Guarantee would have slashed these fixes to £2,500 - but now it has come to an end, they will have returned to their original rate. If this sounds like you, then Martin has said you can ditch your current fix and move to a far cheaper deal.
However, you could incur early exit penalties for doing so.
Taking to Twitter, Martin said: "On Sat, those who locked in on costly fixes - usually c.1yr ago - lost the govt. If so you will see rates jump to substantially more than the price cap rates. So check if your fixes rates have changed.
"If so, and it's materially higher than the cap rates you should consider ditching the fix and moving to your provider's price cap (though factor in any early exit penalties).
"PRICE CAP RATES: Average direct debit price cap rates from 1 July.
- ELEC. Standing charge: 53.0p/day Unit rate: 30.1p/kWh
- GAS. Standing charge: 29.1p/day Unit rate: 7.5p/kWh
"Yet this varies by region (and doesn't apply to N. Ireland) and how you pay."
When asked whether the move was illegal, Martin explained: "No people fixed at a high rate. The govt then subsidised it after they'd taken it out - they are now returning to the initially contracted rate."
And fans of the financial guru flocked to the comments section to tell Martin about their experiences. One, wrote: "I found that with British Gas despite fixing last year, they then moved us to a rate which was HIGHER than the price cap, arguing that the price cap applied differently for fixes."
Another, meanwhile added: "I did get an Email from Scottish Power about this before the new cap came into force, it was going to jump to about 50p/kWh for Elec and 14p/kWh for gas I switched to the Standard Rate immediately."
