Martin Lewis' Money Saving Expert website has updated its latest guidance on whether or not householders should fix into an energy deal now. This comes following predictions from experts, who think that an even sharper energy price cap rise is set for October.
Said price cap - which limits the amount suppliers can charge for individual units of gas and electricity used - rose on April 1 this year, from £1,277 to £1,971. However, Cornwall Insight thinks this could soar by a further £1,388 to hit £3,359 before the year is out.
It is said that the cap could also rise by a further £257 in January 2023 - pushing the total sum to £3,616. This is £1,645 more than it currently sits at.
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The Mirror reports that the price cap currently covers 22 million households. As it stands, there are no open market fixed-rate tariffs which are cheaper than the current £1,971 price cap. However, MSE has flagged some deals which are cheaper than the predicted £3,359 price cap potentially set for October.
The consumer rights website explains that on average, you'll pay 72 per cent more over the next year than currently - based off current predictions. MSE in-turn suggests that you should perhaps consider fixing into an energy deal should you be offered a one-year fix at no more than 70% above your current price cap tariff.
Those who 'very strongly value budgeting certainty' may want to consider fixing at a slightly higher 75 per cent above the price cap tariff, however, prices could change and there is no way of determining for certain how it may fluctuate over the course of the next year.
“This isn't an exact science – do watch my video explainer from a couple of months ago if you want to understand more,” said Martin.
“Fixing below this point is still not a slam dunk, I can't promise I've got this right, there are too many unknowns…this is my best-guess with the information I have at the moment.”
The cheapest rates are normally 'customer-only' deals which aren’t available on the open market - this means you won’t find details of them online. It is worth speaking to your energy provider to see what deals they have on offer right now - but keep in mind the best rates could be pulled quickly.
MSE flagged the E.on Next: Next Online v17 one-year fix - which is only available to existing customers - as being 67% more than the current price cap (£3,297 a year). It said the cheapest open-market rate available right now is from Utility Warehouse - but you have to take out other products as well.
This means it might not be worth it for all households, and it is harder to work out if you’d be better off as you need to factor in these costs and savings too. The Utility Warehouse "Green Fixed 33" one-year fix is on average 45% more than the price cap at £2,850 per year for typical use.
To get access to this fix, you will need to take out broadband, SIM-only mobile contract or boiler and home cover with Warehouse.
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