Martin Lewis issues urgent 'check now' warning to people on fixed rate energy contracts
| Last updated
Martin Lewis issues urgent 'check now' warning to people on fixed rate energy contracts.
The Money Saving Expert sent out an urgent warning to such households in the wake of certain fixed price contracts increasing in price over the weekend.
It began: "WARNING: On an energy fix CHECK NOW if your price just rocketed."
He went on to alert Brits that on Saturday (8 July) a major change will take place, explaining: "Those who locked in on costly fixes - usually c.1yr ago - lost the govt 'Energy Price Guarantee' subsidy.
"If so you will see rates jump to substantially more than the price cap rates."
Lewis went on to tell households: "So check if your fixes rates have changed.
"If so, and it's materially higher than the cap rates you should consider ditching the fix and moving to your provider's price cap (though factor in any early exit penalties)."
The financial guru went on to highlight the average direct debit price cap rates from 1 July with electricity having a standing charge at 53.0p/day with a unit rate of 30.1p/kWh and gas at 29.1p/day with a unit rate of 7.5p/kWh.
In a follow-up tweet on the Twitter thread, he went on to highlight: "Just to be clear this is ONLY info for those already on fixes that have just gone up in price.
"It is about getting off those fixes (moving to price cap is the easy way). It is not about whether those on the price cap should get a fix."
The news follows the Energy Price Cap which came into effect last week (1 July).
Back in May, homeowners were warned about the date they must take a meter reading before an energy price cap change to prevent their energy supplier from determining bill prices that aren't accurate to their typical usage.
That deadline has now passed, and people are now left wondering how it will affect their bills moving forward.
But what exactly is the energy price cap?
Energy regulator Ofgem explain: "The energy price cap sets a maximum price that energy suppliers can charge consumers for each kilowatt hour (kWh) of energy they use. How much you pay depends on how much energy you use."
The cap is also described as a 'government protection' which is calculated by Ofgem.
"At Ofgem we regulate energy suppliers, but we do not regulate the oil and gas production sector," the site continues. "The cap ensures that the profit energy suppliers make is capped."
Simply, the energy price cap is a limit on the price people pay for their energy, with the energy regulator announcing that 'typical' gas and electricity bills will be capped a £2,074 a year from 1 July.
The new cap will leave households currently struggling with the cost of living crisis with an annual saving of £426 by setting a limit on the maximum amount energy suppliers can charge for each unit of gas and electricity.