Personal finance expert reacted to ‘£427’ warning about major change coming as fuel situation gets worse
Martin Lewis gave advice to anyone not on a fixed rate or coming up to the end date(Image: ITV)
In a bitter blow to households, energy bills are forecast to jump by 25% in January, according to Bloomberg Economics. It would mean an extra £427 or so added to the £1,723 energy price cap coming in October, taking it to £2,150.
Donald Trump’s war with Iran is to blame, driving up wholesale gas and electricity prices and adding to inflationary pressures across the wider economy. Personal finance expert Martin Lewis has urged people who get their power from firms like British Gas, Octopus Energy, and OVO Energy, E.ON Next, EDF Energy, OVO Energy and ScottishPower to take action to avoid the worst of it.
Sabrina Hoque, energy expert at Uswitch.com said: “Many of the cheapest fixed tariffs are priced similarly to the current July price cap, so while savings may not be immediate, they will kick in as soon as October hits and increase if January’s forecast is accurate,”
The cheapest fixed tariff on the market today is £1,646 a year for a typical home with Sainsbury’s Energy, followed by Outfox Energy on £1,676. If predictions ring true, they will be roughly £500 a year cheaper than the price cap from January.
However, Ms Hoque added that the caveat is that the rates are high and lock you in for 24 months, meaning they may look far less competitive in a year if the US-Iran conflict de-escalates.
Speaking on his Money Show Live this week, Martin Lewis said: “I cannot say fixing if you’re on the price cap will definitely save you, but it is absolutely the risk-averse thing to do. If you are on the cap and you are worried about prices changing I can’t give you tariffs because at the moment they’re changing throughout the day.
“Do not just do your own firms even you should go to do a whole of market comparison get on a comparison site whole of market means they don’t hide tariffs that don’t pay them there is one that doesn’t hide tariffs automatically I am not allowed to tell you which one it is on air if you go and use one that does hide tariffs go and look at the bottom of the page and it will say show all tariffs tiny tick show all tariffs.
“Make sure you do it. And remember, sorry to make this confusing. When you do a comparison, if you are on the price cap, and I’m talking to people on the price cap, you should be you are comparing against the current price cap. So, you might have to pay more to fix right now, but that should as long as it’s not more than two or 3% more, that’s less than you’ll be paying in a couple of weeks in October and far less than you will be paying in January.”
On the issue of rising energy prices he said: “Ultimately, prices do not look like they will come down because there doesn’t look to be a de-escalation in the Middle East even though Trump has said it’ll probably carry on till November midterms at the latest at a minimum. So, it’s going to probably stay somewhere. I’m predicting I don’t know somewhere high. It would have to come down so much now for it not to be a rise in January. It’s definitely going to rise. It’s probably going to rise quite substantially.”
