Martin Lewis issues 'no brainer' advice to save more money as energy price cap is slashed

Finally some good news in the cost of living crisis, with energy prices set to be lowered for millions of us across the UK.

And you can save even more money on your gas and electricity bills if you follow the sage advice of Martin Lewis.

Ofgem, which regulates the energy sector across England, Scotland and Wales, revealed today (23 February) that the energy price cap will be cut by hundreds in spring.

It's the lowest it'll have been for two years that have seen all of us hit by rising prices, with even less excess income at the end of a month to enjoy the good things in life.

As it stands the energy price cap is set at £1,928 a year.

To clarify, this doesn't mean you're being charged this in a calendar year. Instead it means that £1,928 is the current maximum an energy supplier can charge you every year for using energy in your home.

The new cap has been set at £1,690 a year, meaning households will save a rather chunky £238 over the course of a year.

From a salary point of view, it's about an extra 20 quid in your back pocket every month. It pays for something, that's for sure.

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Taking to X, Money Saving Expert founder Martin Lewis was happy to see the reduction come in. The new price will be effective from 1 April.

He revealed another trick customers can do to save even more on the reduction.

In a post summarising his 'opening thoughts' on the cut in costs to households, Lewis said you can save a further 3% by doing one simple thing.

"You can undercut the price cap by three per cent," he posted.

"The Eon Next Pledge tariff, which you can switch to, charges roughly three per cent less than the Price Cap for the first year.

"To get it, you need to be on Direct Debit and have or get a smart meter. So if that works for you, and you’re planning to stick on the Price Cap, it’s a no brainer."

It's a deal that might become all too familiar, Lewis says, with Ofgem looking to end an 'effective block' on companies offering cheaper switch deals.

Currently, firms have to pay a Market Stabilisation Charge, which means new suppliers must compensate your old one, if it’s offering a cheap deal because wholesale rates are cheaper.

@MartinSLewis/X

Lewis says he predicts the price cap will fall again in the July review by Ofgem, but said prices will still remain 'too expensive'.

He posted: "In a nutshell, for every £100 a direct debit user spends on energy today, they’ll pay £87.70 for it from 1 April.

"So it’s an improvement, and predictions are it’ll drop again in July, though overall prices are still too expensive, nearly double the price of the cheapest pre-crisis."