Martin Lewis Explains What Households Should Do After £693 Energy Bill Rise Confirmed
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Martin Lewis has offered some advice to households following news that energy bills were set to soar.
Yesterday (3 February), the energy regulator Ofgem announced that default tariffs would rise by £693 in April.
This would see the the cap go from £1,277 to £1,971, which represents a record-breaking rise of 54 percent.
And prepayment customers will see a rise of £708, from £1,309 to £2,017.
Understandably, the news left many people in a panic, worrying they may not be able to make ends meet.
Well, the Money Saving Expert has offered some advice to people wondering what they should be doing.
Speaking on his ITV show last night, Martin said the best course of action is to 'do nothing'.
He said prices are expected to jump up once again this October, with some predicting price to break £2,300.
Martin explained that there currently weren't any fixed rates that would see people beat the price cap rise.
He said: "I’ve done the numbers - I’ve had to make a lot of assumptions, I don’t have a crystal ball.
"If we assume that in October, the price cap stays where it is in April, you would have to find a fix that is less than 44 percent more expensive than where we are right now for it to be worth fixing.
"If we think it’s going to go up in October, as that line [on the graph] shows by 20 percent, you’d need to find a fix that is now more than 59 percent more than the price cap today.
"The cheapest fix right now is 68 percent more than the current price cap - way more than the April 1 price cap, even more than my high end scenario in October
"Of course, anything could happen - but there ain’t no market fix that you should be going for right now.
"Maybe some existing customers in certain circumstances with high or low use might find one in these yellow lines [on the graph] but the message for most people: do nothing. Stick on the price cap. Don’t fix."
The rise will likely impact 22 million households in the UK and applies to those who are on their energy supplier’s default tariff.
Ofgem chief executive Jonathan Brearley said: "We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet, and Ofgem will ensure energy companies support their customers in any way they can.
"The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas."