Martin Lewis issues ‘act fast’ warning to people who use Octopus, EDF, Eon, OVO, and British Gas for energy
Martin Lewis has issued an 'act fast' warning to UK residents when it comes to paying for their energy bills.
Whether you pay for your gas and electric through British Gas, Octopus, Eon, EDF, or Ovo, it has been a rocky few years when it comes to the cost of living crisis that still lingers in somewhat hidden ways despite inflation and interest rates coming down.
And the bad news isn't done and dusted with yet, with household bills set to increase significantly from the middle of autumn.
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Ofgem, which regulates the energy industry in the UK, announced in August that the energy price cap (the total amount an average home will pay for its gas and electric) is going up in October by a significant 10 percent.
The current cap of £1,568 a year for a typical home in England, Wales, and Scotland is going to be upped to £1,717 a year. For context, though, this is actually still a year-on-year fall from £1,834 in October 2023.
For those looking to avoid the price rise, Lewis has issued a warning via his latest Money Saving Expert (MSE) newsletter sent to his followers on Tuesday night (3 September).
"The cheapest fixes are disappearing," he writes. "If you want to lock in at a lower rate (especially with a big name), faster is safer."
Lewis adds that fixing at a lower rate is also recommended at this moment in time given the price cap is estimated to rise by three percent when it is next reviewed in January.
Unfortunately, many of the best and cheapest deals have been taken off the open market since the new price cap was revealed. But not all of them.
Asking fast to beat the price cap
According to Lewis and his MSE email, the cheapest standalone deal right now would see you fix your price for one year at a rate that is six percent lower than the looming price cap increase, which will take place from 1 October.
And he warns: "If predictions from analysts at EDF and Cornwall Insight come true (and there is some crystal ball gazing), if you stick on the price cap, you'll pay a whopping 11 percent more over the next year than you do now.
"Yet it's important to understand that six percent cheaper than the 1 Oct cap is still three percent more than the current cap, so for the next month you'll pay more."
Lewis adds that waiting until the October price cap is 'the problem', adding: "Many cheap fixes are disappearing, so waiting may mean you lock in at a higher rate. Of course, if world energy rates drop, prices could be cheaper by then, but there's no way of knowing.
"Plus, in competition terms, firms know that once October hits, more expensive fixes will look relatively better compared with the new higher price cap. So our best guess is if you're doing this for peace of mind, sooner is likely safer."
Cheapest fixed energy deals for you
The cheapest existing deal is from Outfox the Market, which will fix you at six percent below the October price cap.
There's also an EDF deal at four percent below as well as Ovo and Eon at three percent below. All deals are fixed for one year.
On every deal you can expect to find early exit fees if you leave them early, ranging between £25 and £50, so if you fix for the year, stick to it unless you find a phenomenal deal.
You can find deals to fix for longer but Lewis warns 'they're not that cheap'.
"And there are no predictions on what'll happen after a year. The market is so volatile it's impossible to know. So they're only for those who really value long-term price certainty," he writes.
If you truly want to count the pennies, it's worth following Lewis' advice now, not later.
Topics: Martin Lewis, Money, UK News
Tom Earnshaw