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Martin Lewis is urging every household to fix energy bills now

Martin Lewis has urged the majority of households to “do nothing” and stick to the energy price ceiling in the absence of cheap open market deals – but now may be the time for some people to act

Martin Lewis has released his latest energy update
Martin Lewis has released his latest energy update

Martin Lewis has given a fresh update on whether you should agree on an energy contract – and says now may be the time for some households to act.

The MoneySavingExpert has urged the majority of households to “do nothing” and stick to the energy price cap due to a lack of cheap deals in the open market.

However, experts are now predicting that the price cap could rise to £2,800 this October, followed by a hike to £2,900 in January.

Based on those numbers, Martin said those looking for price certainty might want to get an energy deal now because there are open market rates cheaper than October’s price cap.

The current price cap, which caps the tariffs a supplier can charge for each unit of gas and electricity you use, is £1,971 per year for those on a standard tariff paying by direct debit.

Write latest savings expert Martin explained to the newsletter that if you’re looking for a solution, you should look for a one-year fixed-price plan that’s no more than 35% to 40% above the current price cap.

He said this is based on considering four months at the current rate, three at the projected October rate, three at the estimated January rate and two at the April rate.

“If the forecasts are correct, next year you will pay an average of 35% more than now,” explains Martin.

Worried about being able to afford your energy bills this winter? Let us know: mirror.money.saving@mirror.co.uk

“Of course, some of this is crystal ball staring and averaging, but overall my best guess as a rule of thumb is…

“If you’re being offered an annual fix at a maximum of 35% over your current cap rate, or 40% more if you’re very concerned about budget security, it’s worth considering.”

The cheapest fixed prices tend to only apply to existing customers, but Martin has now highlighted some open market prices that fall below his 35% to 40% threshold.

The lowest price for the open market to “just scratch” into its equation comes from Ovo Energy, which is offering a one-year fix for its Better Smart plan that’s 38% above the current price cap.

Regarding the existing customer contracts, Martin highlighted a one-year fix of E.on (Next) V14, which is 30% more.

There are also one year plans from SSE, Ovo Energy and British Gas which cost 32% more compared to the current price cap even if you are already a customer.

Martin explained that bi-year fixes are more difficult to predict in terms of value for money as there is less certainty about how energy prices will fluctuate.

If you wanted to lock in longer, the MSE founder highlighted an EDF two-year deal for existing customers, which is 24% above the current price cap.

Martin’s warning comes after Ofgem’s boss warned the energy price cap could rise to £2,800 in October.

Energy adviser Cornwall Insight set the October price cap at a slightly higher £2,879 before rising to £2,907 in January under new rules which mean the cap can be adjusted every three months.

Millions of households will receive a £400 rebate on their energy bills later this year as families continue to battle the cost of living crisis.

The new support was confirmed to replace the £200 ‘loan-not-loan’ that should have been repaid from 2023.

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https://www.mirror.co.uk/money/martin-lewis-issues-urgent-update-27174871 Martin Lewis is urging every household to fix energy bills now

Fry Electronics Team

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