Martin Lewis issues urgent advice to customers amid fears of energy price cap rise
His advice comes after Ofgem suggested that the price cap is likely to soar to “the region of £2,800” for an average household later this year
Martin Lewis has issued urgent advice to customers as fears of an energy price cap rise continue to mount.
The price cap, which sets the maximum price customers can be charged for typical usage of gas and electricity, was introduced in 2019 and designed to change twice a year.
The purpose of it was to prevent households across the UK on costly standard or default variable tariffs from being ripped off.
It changes every April, to cover the summer months when people tend to use less energy, and again in October before an expected increase in usage.
The next change will take place in October, when Ofgem suggested it is likely to soar to “the region of £2,800” for an average household.
And, as the cost-of-living crisis continues to bite, Money Saving Expert’s Mr Lewis has offered some fresh advise form households across the UK.
When asked by a viewer on the Martin Lewis Money Show on ITV whether now is the right time to lock into a fixed energy deal, the expert said. “The price cap is going to go up 42 percent, we’re predicting in October.
“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.
“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 percent of the current price cap, then it’s probably worth doing.
“You can add five percent on top of that because you get price assurity of knowing what your prices are.”
He 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 percent.
“If you’re being offered those, you may want to look into it.”