Martin Lewis explains what you should do if your energy deal is ending
As you’re no doubt aware, energy prices are set to soar next month. Luckily, MoneySavingExpert Martin Lewis is on hand to offer some advice, this time if your current energy deal is coming to an end soon. Check it out:
Lewis was speaking on Good Morning Britain with co-host Susanna Reid when he was asked what he thought someone who was on a deal that is ending at the beginning of October should do.
The government’s energy price guarantee – still a significant increase on what we have been paying – comes into effect on October 1, and Lewis was asked the about whether the person should stay on an ‘astronomical’ fixed rate or move to the variable rate?
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Lewis explained: “It’s a renaming.
“The energy price guarantee is a two-year-long price cap, when we’ve had three-month-long price caps.
“The way it’s looking right now, I’m not seeing that there are going to be any fixed deals offered, full stop.
“So, if you have a legacy one, that will be very expensive and the new price guarantee will see it’s rate come down but it’ll still be more expensive than the new price guarantee and the lowest it could come down to is the price guarantee price."
He continued: “There’s absolutely no possible gain for you with being on the fixed – the best that fixed could be is the same rate as you would pay if you stayed onto the variable rate and went onto the price guarantee.
“So, do nothing in that specific circumstance.”
Following that example, Lewis then explained why the fixed rates are perhaps not the best rate to be on with the forthcoming spike in cost of energy.
To paraphrase, if you’re currently on a fixed rate that is below the price cap, that’s where it will stay, but if you’re on one that is more than the price cap, the lowest that price will fall will be to that £2,500 maximum price guarantee.
For those who have fixed their rate recently, possibly at a massively high level, the price will fall but might not fall down to the levels of the price guarantee.
However, Lewis claims he negotiated with energy companies to get them to allow customers on those rates to leave without fuss and switch to the guaranteed price.
Essentially, you should check the regional unit rates for your fix – there’s a calculator for that on the MoneySavingExpert website – and work out whether you should stick with what you’ve got or move to the variable rate instead, which will probably put you around at the price guarantee.
It’s a complicated world, but we’re all going to have to learn a bit about it if we’re going to make it through the winter without paying through the nose.
At least Lewis is on hand to offer some practical advice.
MoneySavingExpert has created an energy bill calculator that you can access here
Topics: Money, Martin Lewis, UK News
Tom Wood