Martin Lewis has issued a warning to everyone living in Great Britain as there are set to be changes to how much energy bills will cost tomorrow.
He seems to be fairly confident that they might actually go down – which would be about time – but still wanted to get the word out to let people know what to expect.
Lewis tweeted: “Important. Tomorrow at 7am for the first time in two years, we'll be told UK energy prices will drop... but how does it affect what you pay?”
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Then, he directed people to his website where he offered up some key points about tomorrow’s Ofgem change.
Ofgem is set to announce its three-month price cap which will start in July at 7:00am tomorrow morning, which will decide how much people in England, Scotland, and Wales pay for their energy, regardless of which firm they’re with.
Largely based on the wholesale energy rates in the months leading up to the start date, the cap will decide how much the underlying rates of energy are going to be, regardless of your provider.
However, Lewis warned: “Remember though, there's NO TOTAL CAP on what you pay, it's a cap on the underlying rates, so use more, you pay more.”
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Anyway, here’s what he thinks you need to know.
First off, we’re expecting a drop this time.
According to Lewis, the regulator has confirmed that ‘what we currently pay now will come down considerably’.
He also noted that while the cap might come down 35/40 percent, what we actually pay may only come down 15/20 percent.
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Lewis said: “Since last Oct, what we pay hasn't been at the Price Cap, but a lower rate set by government. It's called the Energy Price Guarantee (EPG), and kicks in when the Price Cap is too high - the state pays the difference.
“From July, the new lower Cap will be under the Guarantee level, so we'll pay that.”
There’s some words of warning, too.
Last winter was bad, but Lewis also warned that this winter coming is likely to be around the same.
He also warned that ‘further government support for lower to middle income households is unlikely’, according to what the Environment Secretary told him on the BBC this weekend.
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Standing charges are also likely to remain high, with a £300 per year charge just to have gas and electricity at all.
The MoneySavingExpert said: “In my view, this leaves a moral hazard that the less you use, the less you save. I have lobbied Ofgem hard on this, sadly to little avail.”
The change to prices might encourage firms to start offering fixed prices again, to which Lewis said: “If any firm offers a fix for not much more than the July Price Cap, for the sake of certainty it's worth considering.”
As for those on prepay meters, Lewis offered some advice – run down your meter before the July 1 date, then top-up, even if it’s just a quid, to ‘kickstart the new cheaper rates’.
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Lastly, he said that there are cost of living payments that are available to people on benefits, state pensioners, and people with disabilities.
If you haven’t been paid those yet, submit a claim.
As for what the actual rates will be, we’ll have to wait until tomorrow morning to find out.
At least Lewis is out there doing the research and looking out for ordinary folks.
Topics: Martin Lewis, Money, Politics
Tom Wood