Millions of households will be hit by yet another price hike from April 1 as money saving expert Martin Lewis has warned Brits to take action as soon as possible
Martin Lewis, the money-saving brains behind MoneySavingExpert.com, has dished out some crucial advice for households hanging onto a standard variable energy tariff: hop onto a fixed tariff as quick as you can.
This savvy suggestion comes after Ofgem, the energy watchdog, dropped the bombshell on Tuesday (February 25) that energy bills will get a 6.4% bump from April 1 – marking the third straight quarter the cap has been hiked.
According to the regulator, the jump means that the average bill for homes in England, Scotland and Wales riding the variable tariff wave will zoom from £1,738 annually to £1,849. It’s all down to a recent frenzy in wholesale prices.
The increase translates to an extra £111 per year, or roughly £9.25 each month, during the price cap’s three-month lifespan. That’s 9.4% or £159 more than the same time last year but thankfully £531 or 22% less than the peak of the energy gloom at the start of 2023.
On BBC Radio 4’s Today Programme, Mr Lewis laid it out plainly – the cheapest fixed deals right now are about 4% cheaper than the looming price cap, and once Ofgem pushes up the figures come April 1, those deals will be about 10% cheaper.
He cautioned: “Based on the predictions at the moment, once it goes up in April it isn’t coming back down to these levels for the next year. So as you can fix currently at cheaper than the current cap, never mind before it goes up, it is a no-brainer to fix.”
Mr Lewis has tipped off consumers to hold off until around lunchtime on Tuesday before hunting for bargains and stressed the importance of using comparison sites that include the entire market by default, rather than those excluding some suppliers who don’t pay to be featured.
He’s caught wind of some thrifty deals set to drop this morning and shared: “And remember that when you do a comparison, remember that the savings you’re given on the cheapest fix are compared to the current price cap.
“So they won’t look big, they might say £30, £40 a year. But remember it’s going up by 6% so if you do nothing your price would rise whereas if you fix your price would drop.”
Ofgem chief executive Jonathan Brearley said: “We know that no price rise is ever welcome, and that the cost of energy remains a huge challenge for many households. But our reliance on international gas markets leads to volatile wholesale prices, and continues to drive up bills, which is why it’s more important than ever that we’re driving forward investment in a cleaner, homegrown system.
“Energy debts that began during the energy crisis have reached record levels and without intervention will continue to grow. This puts families under huge stress and increases costs for all customers. We’re developing plans that could give households with unmanageable debt the clean slate they need to move forward.”