Martin Lewis has issued an urgent warning to billpayers following a spike in energy prices.
The Money Saving Expert (MSE) founder took to Twitter to tell households who are considering fixing into an energy deal to act as "as soon as possible". He explained how wholesale energy prices “have spiked” again over the last week.
This could prompt gas and electricity firms to replace the cheapest existing customer fixes with more expensive deals. A lack of cheap deals has left roughly 22 million families on the standard price cap rate, which is reviewed twice a year by energy regulator Ofgem.
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The latest warning from Martin saw him tell households that they should only consider fixing into an energy deal that is no more than 35% higher than the current price cap. The cap could then rise to no more than 40% higher than the current cap “if you very strongly value budgeting certainty”.
WARNING: Wholesale energy prices have spiked over the last week, so it's plausible energy firms will pull the cheapest existing customer fixes & replace with costlier.
If u are considering fixing, my best guess is go asap. Top tariffs list here https://t.co/43WIOMotUO Pls share— Martin Lewis (@MartinSLewis)
He said: “If you are considering fixing, my best guess is go ASAP.”
Unfortunately, the latest MSE calculations show there are currently no fixes below these thresholds on the open market. However, you might be able to find a tariff that is below 40% through your existing energy provider.
The MSE has highlighted an E.on and E.on Next V14 one-year fix that is 30% more - but again, this is only available to some households that are already with E.on. Two-year fixes are harder to predict in terms of value for money, as it is less certain how energy prices will fluctuate.
If you did want to fix for longer, the MSE has flagged an EDF Energy two-year deal for existing customers that is 34% above the current price cap. This is for the Fix Total Service Jun24v2 two-year fix.
The other tariff flagged by MSE is from So Energy, which is offering one and two-year fixes on its So Hibiscus deal that are both 40% about the current price cap. The current price cap, which sets a limit on the rates a supplier can charge for each unit of gas and electricity you use, is £1,971 a year for those on a default tariff who pay by direct debit.
Ofgem is now predicting that the price cap could rise to £2,800 this October.
Energy consultant Cornwall Insight put the October price cap at the slightly higher £2,879, before rising to £2,907 in January, under new rules that mean the cap can be adjusted every three months.
Millions of households will receive a £400 discount on their energy bills later this year as families continue to struggle against the cost of living crisis.
The new support was confirmed as a replacement for the £200 "loan-not-loan" that would've needed to be paid back starting from 2023.
