Martin Lewis has shared new tariff deals being offered to some existing consumers across the UK which could help millions of households reduce the impact of the next Ofgem price cap due to kick in on October 1.
The latest predictions from the energy regulator indicate gas and electricity bills could sky-rocket by £800 to £2,800 in October and while nothing can be done at the moment to offset the current price cap, the founder of MoneySavingExpert.com (MSE) has shared new details of fixed tariffs now being offered to some existing customers.
Writing in the latest edition of the MSE newsletter, the award-winning financial journalist said: “I promised to let you know when it was time to fix energy. Well, for many (not all) that's today - as for the first time in 2022, there are fixes that most should consider.”
Martin went on to explain how the UK energy market is “broken” as there have been no competitor deals for customers to choose from due to the global crisis, but added that now may be “the time for action” but warned that it’s nothing to “whoop about”.
He wrote: “This week though, it may be time for action, though it's nowt to whoop about. It's happened because the latest analysis is the future looks even WORSE, with the price cap likely to rise even more than we previously thought. This means some costly fixes look like they may now be winners.”
Unfortunately, there are still no options available for households on prepayment meters.
Martin and the team and MSE have created a handy guide to navigating the energy crisis to help people understand why prices are going up and what options are available - read the full guide here.
How the price cap affects millions of households
Until February this year most people may have heard of the Ofgem energy price cap, but paid little attention to it, simply because when one fixed tariff deal was ending there were a ton of deals to choose from, easily found and selected using a comparison website.
But, due to the soaring price of wholesale gas and the situation in Ukraine, these offers disappeared and energy firms raised their prices to the maximum daily standing charges and unit rates allowed by the regulator - the price cap.
MSE warns that some 70 per cent of the UK is now on the price cap, which you are automatically moved on to if a previous fix deal ends, or your energy firm has gone bust and Ofgem has moved you to a new supplier.
But with the predicted £2,800 price cap coming in October, Martin’s ‘magic number’ to watch for is 35%.
While nobody has a crystal ball to predict what the price cap will look like in April 2023, Martin’s rule of thumb is: “If you're offered a year's fix at no more than 35% above your current price-capped tariff, or 40% more if you very strongly value budgeting certainty, it's worth considering.”
You can watch a video of Martin explaining why this might be a good option, here.
New deals for existing customers
The easiest and quickest way to find out if your energy supplier is offering existing customers a fixed deal is to contact them and ask.
MSE explains that these deals aren’t made public and their data is reliant on customers sharing details with them to help other people save some money during the cost of living crisis.
Below is a summary of fixed tariff deals by supplier, full details about offer terms and early exit fees can be found on MSE.com.
Just be aware, these new tariff deals are higher than the current price cap, but should result in the rates being lower than the October price cap of £2,800.
- EDF: Two-year existing customer fix for those currently on its standard tariff, or coming off a fix
- E.On Next: One-year existing-customer fix
- SSE: One-year existing-customer fix
- Ovo: One-year existing-customer fix
- Ovo Energy: One-year open-market fix
- British Gas: One-year fix for existing customers on fixes that are ending
- British Gas: One-year fix for customers auto-moved to it when their old firm went bust
MSE also explains how all the existing customer deals are above the current price cap, but will essentially reduce the impact of the October rise.
Always remember to do your own research into energy deals and compare how an increase now will affect your current household budget.
To keep up to date with the cost of living crisis, join our Money Saving Scotland Facebook group here, follow Record Money on Twitter here, or subscribe to our twice weekly newsletter here.
