Martin Lewis urges energy customers to think about switching to new fixed tariff

Money Saving Expert's Martin Lewis during a joint press conference with Facebook at the Facebook headquarters in London. (Photo by Kirsty O'Connor/PA Images via Getty Images)
Martin Lewis has issued new advice over fixed energy deals before prices spike again this winter. (Getty)

Martin Lewis has issued new advice on fixed energy deals before prices spike again this winter.

Soaring gas and electricity prices have left the UK gripped in a cost-of-living crisis, with dire warnings average annual bills could increase to more than £3,500 in October.

Inflation increased to 10.1% in the 12 months to July, the Office for National Statistics (ONS) said, the highest level for 40 years.

Consumer champion Lewis, founder of MoneySavingExpert.com, has now increased the suggested threshold consumers should bear in mind when thinking about switching to a fixed-rate tariff.

Close-up of a smart meter in a UK home, showing high electricity and gas expenditure figures for the month.
The energy cap is expected to rise once again in October. (Getty)

In an update on the MSE website on Monday, Lewis said there are no fixed tariffs that are meaningfully cheaper than current deals. However, he said some on offer now would be cheaper than the predicted October prices.

He wrote: “If the predictions are right, on average you’ll pay 117% more over the next year than you do now.

“If you’re offered a year’s fix at no more than 115% above your current price-capped tariff, or 120% more if you strongly value budgeting certainty, it’s worth considering.”

MSE’s guidance changed on Monday, when the advice was that consumers should not switch to a fixed rate deal that was more than 95% above the current price-capped tariff.

Lewis based his advice on analysis from market research firm Cornwall Insight, which predicts the energy price cap will hit £3,554 from October, then rise to £4,650 from January.

He added that, usually, the only fixes worth taking up were for existing customers, but these were not required to be publicised.

Lewis advised the best way of finding these deals was to contact your energy firm and suggested Utility Warehouse and E.on could be worth considering.

He warned there were risks with taking a fixed deal as a new prime minister would be elected on 5 September and they may offer further assistance to struggling households.

He said any moves made by the government would be unlikely to reduce the price cap but there was an “outside chance” they would and this would not help those on a fixed deal.

Lewis said there was also a risk of energy firms going bust and consumers ending up back on the price cap.

Electric bill charges paper form on the table
A fixed energy deal could be your best bet this winter. (Getty)

Liz Truss, the frontrunner to be the next prime minister, has signalled she could help firms and households with soaring energy bills with direct support this winter.

She said she was looking at assistance “across the board” despite in the past insisting she was focused on tax cuts rather than what she termed “giving out handouts”.

Tory leadership rival Sunak hit out at Truss on Tuesday as he warned his rival’s plans could pour “fuel on the fire” and worsen inflation.

Regulator Ofgem will announce the new level of the energy price cap on Friday.

Published by anthonyhayble

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