Martin Lewis has shared details of a green electricity tariff provided by Octopus Energy, which could be a good option for people trying to keep costs down after the £400 Energy Bills Discount Scheme ended last month. This provided over 26million households with a £66 or £67 credit on their electricity bill from October 2022 for six months.
The UK Government announced in the Spring Budget that the Energy Price Guarantee (EPG) will remain at £2,500 until the end of June. This had been due to rise to £3,000 on April 1, but a campaign led by Martin Lewis and backed by over 130 charities and organisations saw a U-turn on the decision.
However, the consumer champion is urging people to show caution if considering a fixed-tariff, as prices are expected to come down by 20 per cent this summer. The founder of MoneySavingExpert.com explained to one listener of his latest BBC Radio 5Live Podcast that Octopus Energy customers have access to a "clever" variable tariff which could save them money.
Heather is with Octopus Energy and has just moved into a new detached house, but the energy costs are considerably higher than her previous property, she asked Martin if it’s worth trying to get a fixed deal. He said: “You don’t have access to a fix at the moment, you may well do in the future but there’s only one at the moment (Ovo).
“I’m sure in the future, I’ll be talking about when new fixes come out at what point it’s really worth it. For me, I would want to be seeing 14 or 15 per cent cheaper than the current Energy Price Guarantee before I fixed, based on current predictions.”
Martin continued: “But what you have access to as an Octopus customer is Octopus Agile tariff, which is not a fix, it is a variable tariff. It’s a clever variable tariff though. It prices you half hourly, the rates you pay move every half hour based on wholesale rates.”
The financial guru did advise that it tracks wholesale prices but is a bit more complex than his simple overview, but that’s the easiest way to understand it. He said: “That tariff is best for people who use a lot of energy at night such as those with storage heaters or you’re charging an electric car, but currently because wholesale rates are so cheap it is generally a lot cheaper than the Energy Price Guarantee rate.”
But Martin warned that if wholesale rates go up, customers will “instantly start paying more” which means there is “no certainty at all” and in effect would be “riding the wave of the market”.
He also explained that non-Octopus Energy customers would need to switch to that provider’s standard tariff first and then move to the Agile tariff afterwards. Martin added: “That’s a bit more of a ‘casino’ tariff but currently, it’s very cheap.”
The dedicated pages on the Octopus Energy website advise that due to “continued market volatility and the beta nature of this smart tariff we may need to restrict daily sign ups. You're still free to sign up below, and we'll let you know if this affects you joining Agile”.
It continues: “In Winter '22-'23, a typical household on Agile paid around 35p/kWh on average (a little more than the average variable tariff).” Agile prices can spike up to 100p/kWh any time - that's three times higher than most customers are paying right now.
This tariff is best suited to customers who can shift large amounts of their energy use to avoid these expensive peaks, often by using smart home technologies like solar and batteries.
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