Martin Lewis says there’s a way some people can save on energy bills with a fixed tariff, but the Money Saving Expert founder warned it could pose some risk
Video not available
Martin Lewis has explained how a fixed tariff can save money on energy bills – but warned it’s a risk.
The Money Saving Expert star was today answering questions about energy bills on ITV’s This Morning, hosted by Phillip Schofield and Holly Willoughby, when Lynn called on the show to ask Martin if she should opt for a variable or fixed rate coming months amid news of the energy price cap being raised.
“I’ve just received details of my new plan and if I repair as usual the price has gone up from £83 a month to £189 a month. I have the option to go variable that the cost will be £102 but does variable mean it can change from month to month?” she explained.
Martin answered her question and walked viewers through energy price caps and the differences between tariffs.
“Let me walk you and everyone else through this, that’s a big question I get so I’ll try to take it slow. Well, as you’ve heard, there’s no actual price cap, but I’ll use the numbers for someone with typical usage now,” he said.
“The current price cap until the end of this month is £1270. As of April 1st it’s up 54 per cent to £1970, a huge increase that everyone will be faced with. Your variable number I assume is for now and will go up another 50 per cent bringing you to £150 a month. The big question is what will happen in October.
He added: “The October price cap is based on the wholesale prices these energy companies pay over six months.
“We’re now a month through those six months so it’s a lot of crystal ball glancing at the moment and I can’t promise my answer that I’m going to give you now is correct, it’s just my best guess. But based on where we are right now, after the horrible things happened in Ukraine, which means wholesale prices have skyrocketed. It looks like in October, on top of the 54 per cent increase in April, we will see another increase of around 45 to 50 per cent if you put a typical energy bill at £2,900 a year.”
However, Martin warned it was a risk – but there was a way to save money on your energy bills.
“But if you just look at it on that basis, and that’s just a month into the sixth-month assessment period, it could get worse and better. But based on that you can now find a firm deal for a year or more that is no more than 25 percent above the April price cap, then I would consider a price fix if you want price certainty,” he added.
“I can’t promise it will be the best result. If not, I would stay where you are and stick with the current price cap.”
However, he warned that most companies cannot offer this via energy comparison portals and that you usually have to rely on your energy supplier to offer you a special tariff as an existing customer.
https://www.mirror.co.uk/tv/tv-news/martin-lewis-shares-how-save-26376471 Martin Lewis shares how fixed tariffs can save on energy bills - but it's a risk