Money expert Martin Lewis is urging people to switch to a fixed energy deal as soon as possible – because you are losing money ‘every day’ that you don’t.
This week, energy regulator Ofgem raised the price of gas and electricity by 6.4%, or by £111 on average, increasing the average bill for a typical use dual-fuel household to £1,849 per year. It’s the latest in a series of rises which has seen electricity and gas bills rise by 18% in the past year, and it means that anybody who is not on a fixed deal – which is still most households – is paying too much. It means whether you’re with British Gas, EOn, EDF, Ovo, Octopus or another supplier, you’re going to pay more if you’re not on a fix.
That’s because there are cheaper fixed deals available right now which will save you money against the price cap, and indeed, even if prices do drop in three months when the next Ofgem cap is set, will still save you money.
Speaking on his latest podcast available via BBC Sounds and Spotify on April 2, Martin Lewis said: “That’s 6.4% on top of 1.2% on top of 10% in October which means it’s up 18% since we had a change of government. So, you know, that is a difficult political question for the government to have to answer when they came in with the promise that energy bills will go down.
“What do you do? Well look, based on the assumptions at the moment and the predictions, the price cap moves every three months, if you’re on the price cap, it’s a pants cap, you could get a 14% cheaper fix right now than the April price cap that we are currently on.
“That is likely, the April price cap, to drop about 7% in July and stay at that rate for the rest of the year, but if those predictions are right, then the current cheapest fixes are still 7% cheaper than you’d pay for the rest of the year.
“And if you get a fix, you have peace of mind you know what you’re going to pay. So I would say most people should get off the pants cap, look at fixing or some of the other innovative tariffs out there, but get on with it. Every day you stay on the price cap is a day you are paying too much.
“If you’re worried about things changing then just make sure any fix you get has relatively limited early exit penalties if you needed to leave early.”
The Martin Lewis Podcast is still available to listen to via BBC Sounds here.
