Martin Lewis is urging millions of Britons to consider fixed tariffs if their offered deal is cheaper than the new energy price cap figure. The man behind Money Saving Expert has said the new prediction that annual energy bills will soon hit £4,226 will have a huge impact on people's livelihoods.
Energy bills for millions of households could hit £4,266 next year, meaning the average bill would be £355 a month, instead of £164 a month. The grim predictions were made by consultancy Cornwall Insight after Ofgem announced its decision to change the price cap every three months instead of six.
The latest energy price cap, which limits the rates a supplier can charge for each unit of gas and electricity householder's use, is due to be announced at the end of August but Cornwall expects the cap to rise to £3,582 a year, compared to the regulator's prediction of £2,800 a year, that's a rise of 81%, and a further 19% rise in January, 2023.
Martin Lewis broke his social media silence to discuss the new predictions and stated that the amounts are "unaffordable for millions." In a series of tweets he said that the government need to prioritise an action plan immediately as the new hikes will risk mental wellbeing and lives of many.
Previously the finance journalist has said that switching energy providers or tariffs won't make any difference because of the huge price cap cost but this has now changed.
He said: "There are opportunities to take action to help, not because there are great deals out there, but because the latest analysis is the future looks even worse, with the prediction for the next price cap continuing to rise, so it's now far higher than even a couple of months ago.
"This means some sickeningly costly fixes look like they may now be winners."
Mr Lewis said the vast majority of homes are on the energy price cap price, even those who have never switched tariff, or if their cheap fix ended and they did nothing or if their energy firm went bust last year and they moved elsewhere and haven't switched again.
The latest advice for households isn't about switching to somewhere cheaper but whether there's a deal likely to be cheaper than the price cap over the next year.
He said: "For that, clearly there need to be fixes you can lock into that are cheaper than the expected October price cap. And there are."
When factoring in two months on the current rate, three at October's, three at January's, three at April's and one at July's, and adjust for higher use in the winter, if the predictions are right, on average Brits will pay 96% more over the next year than they do now, according to the Money Saving Expert's predictions.
Mr Lewis said: "If you're offered a year's fix at no more than 95% above your current price-capped tariff, or 100% more if you very strongly value budgeting certainty, it's worth considering.
"Fixing below this point is still not a slam dunk, I can't promise I've got this right, there are too many unknowns, just that this is my best-guess with the information I have at the moment."
Energy deals to consider
The fixed energy deals below, provided from the MSE team, are based on an average of the cost, existing customers may get a higher or lower cost based on a more accurate quote of their current usage.
There are now fixes worth considering from E.ON, British Gas, OVO, SSE and EDF , who all have fixes that are just outside Mr Lewis's predicted percentage (see above) for when it's worth considering, so they could still be worth thinking about if you want price certainty.
- Utility Warehouse Green Fixed 34 one-year fix: has a fix at 50% more than the current price cap. Yet you can't just switch to it without signing up to its other utility products. £2,950 a year and £50 dual-fuel exit fees.
- E.on Next: Next Online v18 one-year fix: has a fix at 73% more than the current price cap. £3,407 a year with no exit fees. E.on says it's available to all existing customers.
- British Gas: Fixed Oct 23v4 one-year fix: has a fix at 93% more than the current price cap. £3,811 a year and £200 dual-fuel exit fees. British Gas says it's available to existing customers on its standard variable tariff.
Ovo Energy : Better Energy one-year fix: has a fix at 102% more than the current price cap. £3,975 a year and £60 dual-fuel exit fees. Ovo says it's available to all existing customers. This deal is just above the MSE percentage for when a fix is worth considering, but could still be worth a look if you strongly value price certainty.
SSE: 1 Year Fixed v34 one-year fix : has a fix at 102% more than the current price cap. £3,975 a year and £60 dual-fuel exit fees. SSE says it's available to all existing customers. This deal is just above the MSE percentage for when a fix is worth considering, but could still be worth a look if you strongly value price certainty.
EDF Energy: Fix Total Service Aug24 two-year fix : has a fix at 103% more than the current price cap. £3,999 a year and £200 dual-fuel exit fees. EDF says it's available to all existing customers. This deal is just above the MSE percentage for when a fix is worth considering, but could still be worth a look if you strongly value price certainty.
To get an existing customer fix you will need to contact your energy provider via telephone, their web chat service or check your online account to see if you can get it. Ensure it's the same tariff though as there can be other tariffs with similar names.
The above tariffs may be able to squeeze money off bills over the next year as long as customers are with one of the firms that will give them the cheapest existing-customer fixes. They will pay a lot more in the next few months to fix now but the MSE team say the hope is that they will gain later.
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