Money Saving Expert founder Martin Lewis shared the “only” energy tariffs he would consider ahead of April’s price cap change.
On April 1, energy regulator Ofgems’ price cap will drop by around 12 percent leaving millions of households benefiting from cheaper gas and electricity unit rates.
With more fixed energy tariffs returning to the market, Mr Lewis shared the select few tariffs he would consider.
Giving an exclusive talk on the opening morning of this year’s Ideal Home Show, Mr Lewis said: “We are in an interesting position at the moment, as the wholesale rates of energy that firms pay are increasing, but the rate at which we pay is not decreasing as quickly.
“The vast majority of people in the country’s pay is dictated by the energy price cap which is set by Ofgem which says that the maximum standing charge (if you are on the standard tariff), then firms can go lower in price, but they don’t, so effectively Ofgem sets the price.
“It does this based on wholesale rates with a lag, so the April price is based on wholesale rates from November to mid-February.”
Mr Lewis continued: “We know the April price has come down an average of 12 percent, but here’s the difficulty. You have two choices of tariff.
“You can stay on the variable tariff that is either price capped or linked to the price cap, or E.ON Next Pledge. The E.ON next pledge tariff is basically a three percent discount off the price cap.
“If you are on the price cap, provided you pay by direct debit and are happy to get a smart meter then you may as well be on the E.ON Next Pledge because it’s three percent cheaper than the price cap.”
Mr Lewis added: “The only other tariffs I would think of are from Octopus, the tracker tariff and the agile tariff.”
Octopus Energy’s tracker tariff price moves every day based on wholesale rates, while the agile tariff price moves every half an hour based on wholesale rates.
Mr Lewis said: “They have for the last few months been substantially cheaper than the price cap, but there is no guarantee that they would continue to do so.”
Delving into the prospect of fitting solar panels to save some money, Mr Lewis said if people have the right circumstances, the payback time is “anywhere from eight to 15 years” while energy bills are as high as they are now.
He said: “You get them installed right, fitted right, if you’ve got the cash, it certainly helps the environment.
“I am pro-solar panel and there’s a whole guide on MSE to take you through that.”
Mr Lewis also gave his verdict on smart meters. He told attendees: “The rollout of the smart meters has been a disgrace in this country, 20 percent of them don’t work and meet people with nothing more than a fixed metre which is what you’ve got anyway.
“If it doesn’t work, you’re not necessarily worse off. On a macroeconomic level, it has been a terrible rollout.”
Martin Lewis was speaking at the Ideal Home Show at Olympia London, which runs from Friday, March 22 to Sunday, April 7. Find out more at www.idealhomeshow.co.uk
