Money expert Martin Lewis has given his advice on how to avoid a spike in energy bills as they are forecast to rise soon.
Households are expected to learn that their energy bills will rise by around 1 per cent in October when the Ofgem updates its price cap on Wednesday 26 August.
Experts at the respected Cornwall Insight have predicted the typical household energy bill will rise by £17 to £1,737 per year when the new price cap comes into force.
The energy price cap is the maximum amount energy suppliers can charge you for each unit of energy if you’re on a standard variable tariff. That includes most households. It is expressed as an annual bill for an average home.
Mr Lewis says now is a good time to take stock of their finances by checking if they could get a cheaper deal. Writing on social media, the money expert said: “Now we know the Cap is now pretty certain to stay at about its current level, or a little higher, until the end of 2025, it’s easy to compare to the cheapest fixed deals which are”
There are several fixed deals on the market which are as much as 15 per cent cheaper than the predicted new rate, working out at around £250 cheaper a year.
Most of these are fixed for at least a year, meaning that rate is guaranteed for 12 months. Some providers will charge an early exit fee to end these deals, while others don’t.
Mr Lewis said: “For getting a cheap fix right now not to be worth it we’d need to see pretty immediate and monumental falls in wholesale rates – which no one is predicting.
“In fact our analysis shows that at every point over the last 18mths you’d have been better off getting the getting the cheapest fix than being on the Cap.”
Cornwall said its forecast reflected changes it assumed Ofgem would be introducing in the upcoming cap period, including the expansion of the Warm Home Discount scheme for vulnerable households that would add around £15 to a typical bill, while also providing £150 in support to 2.7 million additional people.
However it also noted that wholesale prices for electricity and gas had been “volatile”, largely reflecting geopolitical factors including uncertainty over US trade policy.
A Department for Energy Security and Net Zero spokesperson said: “The only way to bring down energy bills for good is with the Government’s clean energy superpower mission, which will get the UK off the rollercoaster of fossil fuel prices and on to clean, homegrown power that we control.
“We are taking urgent action to support families this winter – in addition to expanding the £150 Warm Home Discount to 2.7 million more households, we are strengthening customer protections, including by giving people quicker and easier access to automatic compensation when their suppliers let them down.”
