Martin Lewis reveals 80% of houses are overpaying on their power payments as he shares easy approach to get cheaper costs
Martin Lewis has revealed that 80 per cent of homes in England, Scotland and Wales are overpaying for their energy.
Speaking on The Martin Lewis Money Show Live on Tuesday evening, the Money Saving Expert founder, 52, explained that those who are on a price-capped tariff – 80 per cent of people – are overpaying.
The price cap, set by Ofgem, puts a limit on the maximum amount energy suppliers can charge for each unit of gas and electricity you use and standing charge if you’re on a standard variable tariff.
‘Standard variable tariff’ is the name that suppliers including British Gas, EDF and Scottish Power use for their price-capped tariffs.
Martin explained: ‘This is all about: are you on a price-capped tariff? If so, you are overpaying and you will continue to do so.’
He then revealed to viewers in the audience and at home how to work out if you are overpaying.
‘You’re not on the price cap if you’re on a fixed currently or if you have actively chosen a specialist tariff that you are on,’ said the expert.
‘You are on a price-capped tariff if like 80 per cent of homes – most of you – you’re on a firm’s standard tariff, so you haven’t switched in years or you were on a fix or a specialist tariff and it ended and you came off it and you did nothing.
Martin Lewis has revealed that 80 per cent of homes in England, Scotland and Wales are overpaying for their energy
‘If you’re not sure, you’re most certainly on the standard tariff,’ Martin claimed.
He added: ‘Now the energy price cap rose one per cent a couple of weeks ago on the 1st of January. That’s on top of the 10 per cent rise in October
;Almost all firms – it’s called a cap, it’s really a lock in – they charge the maximum or very near the maximum. And if you’re on a price capped tariff you’re paying the rates that Ofgem sets for you to pay.
‘State of the nation: prices dropped last winter, they came down again, they bottomed out in July and then they went up in October, then they went up again and the current price cap – it changes every three months – it lasts until April.
‘It would be very unlikely for it to be dropping substantially in July,’ concluded the expert.
As such Martin, suggested to viewers that they opt for fixed energy bills, adding: ‘A fix gives you peace of mind that you lock in a set rate.
Speaking on The Martin Lewis Money Show Live on Tuesday evening, the Money Saving Expert founder, 52, explained that those who are on a price-capped tariff – 80 per cent of people – are overpaying
‘The cheapest fixes now are five per cent under the current price cap. So if it goes up 5 per cent in April, they’re ten per cent cheaper than the prospective April price cap.
‘And you are locked in for 12 to 18 months with no price rises, giving you peace of mind – you’ll know what you pay.’
He explained how most of the cheapest fixes don’t require a smart meter and the cheapest fix and the rate you pay depends on where you live and how much you use.
Meanwhile, last month, Martin issued an urgent plea to state pensioners who were born before 1958 to claim a free £3,900 government payment.
The money saving expert urged state pensioners that they could be entitled to a £3,900 yearly boost from the Department for Work and Pensions (DWP) – though they must claim the cash themselves as it won’t arrive automatically.
Martin’s Money Saving Expert team said a whopping £1.7 billion is waiting to be claimed by 850,000 state pensioners, urging those born in or before 1958 – aged 66 or older – to apply.
To meet the criteria for the £3,900 payment, applicants must be single and have a total weekly income under £218 – though the ITV and BBC team said those receiving less than £235 could also get it.
There is also the chance that couples could be entitled. For those of pension age earning a weekly total under £333, the chances of checking in the cash are high.
The price cap, set by Ofgem, puts a limit on the maximum amount energy suppliers can charge for each unit of gas and electricity you use and standing charge if you’re on a standard variable tariff
‘Standard variable tariff’ is the name that suppliers including British Gas, EDF and Scottish Power use for their price-capped tariffs
Equally, couples who earn less £350 per week also have a good chance of being entitled to the money.
Though the cash won’t arrive automatically and must be claimed, according to the money saving website.
MSE warned: ‘It’s NOT automatic so you MUST claim – here’s how. You can apply via Gov.uk if you’ve already claimed your State Pension, otherwise phone the Pension Service on 0800 99 1234 (or the Northern Ireland Pension Centre on 0808 100 6165). You can backdate it for three months, so the quicker you check, the quicker you’ll benefit.’
Finance expert at Ocean Finance, Fiona Peake, said: ‘The cost-of-living crisis has hit older people hard. Aside from immediate financial relief, claiming Pensions Credit can help protect you against rising costs.’
She added: ‘With the energy price cap increasing once again at the start of January and food inflation remaining stubbornly high, claiming what you’re entitled to is a smart move. If you think you might qualify – or know someone who could – take five minutes to check.’
‘Many people assume that claiming Pension Credit is a complicated process or that they won’t qualify because they have savings or a small private pension.
‘In reality, it’s a straightforward process, and the rules are more generous than you might think. It’s always worth checking, even if you only receive a small amount of Pension Credit, it could unlock other support worth thousands of pounds.’
