Martin Lewis Answers Big Question About Fixing Bills As Energy Prices Set To Rise By 65% In October
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Martin Lewis has given his answer to a big question that's preying on the minds of many over their energy bills.
People's bills are skyrocketing right now and set to rise even further in the coming months.
With many households facing the stark choice between heating homes and putting food on the table, they need all the help they can get.
Slamming the British energy market as 'broken', the Money Saving Expert himself has said he's being asked by plenty of people whether they should stick to the energy price cap or go for a fixed energy tariff now, before costs climb higher.
With 70 percent of households depending on the price cap and others on fixed rates, the big question is which method will be better in lessening the impact of energy bills going up.
According to Lewis, right now there are no fixed price energy tariffs offering something 'meaningfully cheaper' than the price cap, but there are some which would probably save you money once prices shoot up in October.
The price cap changes every three months, so it'll shift next in October, then again in January and April next year and so on.
The latest predictions are tipping the cap to go up by 65 percent in October, which could push the average household energy bill to £3,244 a year on typical use.
At the moment the average energy cost to households on typical use is £1,971, so people will seriously feel the squeeze in a few months.
It's then expected to go up a little more in January before coming back down in April by a slight amount.
The further into the future we look, the weaker the prediction becomes, so the current predicted April rate of £3,195 is likely not to be spot on, though the message should be that prices will almost certainly be higher then than they currently are now.
Question I'd like all potential Conservative leaders to answer (RT if agree)— Martin Lewis (@MartinSLewis) July 11, 2022
The energy price cap's predicted to rise 64% in Oct taking a typical bill to £3,244/yr; & rise again in Jan to £500/yr more than when May's help package was announced. What'll u do to avoid this & when?
Lewis suggests if you can find a fixed rate energy tariff for a year that is at most 55 percent more expensive than your current bill then you should consider making the switch.
It'll mean you spend more in the short term before the October price cap rise kicks in, but could save you money over the course of 12 months.
That figure was picked as if the predictions bear out then on average people will be paying 57 percent more for their energy bills if they stay on the price cap.
Unfortunately for those thinking about switching, many of the better options are 'existing customer only'.
Lewis's Money Saving Expert team did find a fixed rate of 45 percent higher prices with Utility Warehouse, but the catch was you also had to sign up to two more of their services to qualify.
The cheapest fixed rate available to everyone without signing up to multiples, from Ebico Living, was a whopping 103 percent more than the price cap and absolutely not worth going for.
There are other dangers to changing too, as if your energy provider goes bust and you're on a fixed rate with them, you'll end up going right back onto the price cap having likely paid more in the short term.
Lewis also highlighted the possibility that a new government with a new prime minister, due to be in office by 5 September once Boris Johnson has finally gone, might announce more help for people.
There can be no beating about the bush, these price rises are going to be 'hell for many' and the Money Saving Expert has a useful guide for those who are really going to struggle.