Martin Lewis has taken to X (formerly Twitter) with some thoughts and advice for UK consumers, following the news that the energy price cap is to go up by 6.4% on April 1.
The announcement by Ofgem, the energy price watchdog, means that the average annual household energy bill will go up by around £111, equating to £9.25 a month.
The news means that price caps have risen for the third consecutive quarter – 9.4% or £159 higher than last year, but still £531 or 22% less than the height of the energy crisis at the start of 2023, according to PA.
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The Money Saving Expert broke the news down to his followers on X, with his main piece of advice urging consumers to change from a standard variable tariff to a fixed one.
“If you’re not on a fix or special deal you are likely on the Cap,” he wrote. “It applies to firms; standard default consumer tariffs, often called ‘Standard Variable’ or ‘Flexible’ tariffs. If you don’t know assume you, like two third of homes, probably are.”
He made his feelings on the cap clear, writing: “THE PRICE CAP IS A PANTS CAP GET OFF IT IF YOU CAN – FIX NOW IF YOU HAVEN’T ALREADY.”
“The cheapest year-long standalone fixes right now are about 4% LESS than the current Cap, never mind once it rises in April, so if you get a good fix now, you lock in at a cheaper rate for a year.”
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“Get price certainty, save instantly and save relatively more once we get to April.”
Lewis also broke down what the cap meant in real terms: “For every £100 you pay for energy now, from April people will typically pay roughly £106.40.”
“Yet in reality as the daily standing charge is dropping, some lower users (below £100/mth) will see only small rises, but those who use a lot (above £200/mth) will likely see 7%-10% increases.”
Use our energy bills calculator to estimate how much your bill will increase from April.
But Lewis clarified that these are only averages, as there is ‘a lot of regional variation in prices’ particularly in the north west “as there, electricity standing charges are rising”.
“We’re already building a calc on MSE to be available later today so you can see the direct impact.”
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Another option he gave for those with very low energy usage (i.e. under £80 a month) was to look at ‘special tracker deals’.
“British Gas & EDFs special tracker deals discount £50 off the annual standing charge (as with low usage that’s a bigger proportionate saving).
“And sophisticated users should look at (or likely already know about) Octopus or Tomato’s time of use tariffs. “
Looking to the future, Lewis said that current analysts predict prices to “stay roughly that rate for the next year” after April 1 – “though the further out you go the more crystal ball gazing that is”.
“The chance of peace in Ukraine, the Middle East, or US pumping out oil could see energy prices fall. Still the safe bet based on current predictions is to fix.”
Lastly, Lewis highlighted the expansion of the Warm Home Discount, which is slated by the government for next winter.
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“The govt proposes to expand the £150 Warm Home Discount to 2.7m more low income households this winter (though a chunk of that’ll be eaten up by the cap rise where the 6.4% rise is equivalent to £111/yr on an annualised bill).
“It’ll be done by getting rid of the ‘high energy cost’ criteria for those on means tested benefits like Universal Credit (which helps working people and non working on low incomes).”
“That’s good as it’s a terribly implemented system which left many, literally, unfairly out in the cold.”
But throughout his statement Lewis stressed that this was just an ‘instant briefing’ that he would expand on later.
“Your cheapest fix depends on where you live and how much you use, so do a comparison (the MSE http://cheapenergyclub.com is whole-of-market-by default) though I’d wait a couple of hours as I hear more tariffs are being launched.”
“Remember though the savings comparison sites will show now are compared to the current cap, they will be bigger compared to April. “
“There’s also a proposal on old energy debt support, which sound good, but needs reading so I’ll leave that for now.”
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