Martin Lewis has issued urgent advice to every British Gas and E.On customer as household energy bills continue to rise. Appearing on his Martin Lewis Money Show Live ITV broadcast last night (May 24), the financial expert told viewers that anyone with British Gas or E.On should check if they can fix into an energy deal that is less than the current price cap.
It comes after an Ofgem boss Jonathan Brearley told MPs yesterday that the energy price cap could go up to £2,800 in October, an increase of around £830. He said Russia's invasion of Ukraine has caused the global gas market to become unstable and described the current situation with energy prices as a "once-in-a-lifetime" scenario.
Mr Brearley added: "I am afraid to say conditions have worsened in the global gas market since Russia’s invasion of Ukraine. Gas prices are higher and highly volatile.
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"At times, they have now reached over 10 times their normal level. I know this is a very distressing time for customers but I do need to be clear with this committee, with customers and with the Government about the likely price implications for October."
Although energy bills have already rocketed for millions across the country after the April price cap was increase to just under £2,000, Independent energy market analyst Cornwall Insight has revealed bills could rise further, reports the Mirror. The firm shared its prediction that a typical UK household will face an annual energy bill rise of £600 from October, which would take a home's average gas and electricity bill to £2,595.
During Tuesday's episode of Martin's show, the Money Saving Expert founder was asked whether now is the best time to lock into a fixed rate energy deal by a viewer. The 50-year-old explained that currently there aren't any open-market rates that are cheaper than the existing price cap. However, he he said that Brits may be offered a cheap rate from their current provider.
“[The price cap] is going to go up 42 per cent, we’re predicting in October," he said. "And then even though the new price cap only lasts three months, the latest estimates I’ve had from analysts is the January price cap for the next three months is going to be the same.
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"So we’re expecting it to be around £2,800 until next April - it’s horrible isn’t it - then it is going to drop a little bit. When you plug all that in to where we are now - four months on this price cap, then six months on the next price cap - effectively, if you can find a fix below around 30 per cent of the current price cap, then it’s probably worth doing. You can add 5 per cent on top of that because you get price assurity of knowing what your prices are."
Martin then highlighted how British Gas and E.On are reportedly offering existing customers fixed deals below the 30 per cent threshold that he would consider locking in at - or 35 per cent for those after price assurance. But as these rates aren't advertised online, household owners will have to be a customer with the firms already to be offered them.
Martin added: "We’re seeing existing customer fixes where an existing company is offering you a cheap fix. They don’t have to publish those rates, unlike those open market ones, so I don’t have them. I ask people to feed them in and we estimate them.
"I believe there is an E.On two-year fix that people are being offered and British Gas one-year fix that people are being offered that are within less than 30% [of the price cap]. If you’re being offered those, you may want to look into it."
The price cap for those on default tariffs paying by direct debit increased by £693 from £1,277 to £1,971 last month. This marked an eye-watering rise of around 54 per cent as the UK continues to struggle against a cost of living crisis.
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