Today is the last day to act
Martin Lewis has issued a final warning to customers of Octopus, British Gas, OVO, EDF and Eon.
Lewis says people could save more than £100 on their energy bills if you follow advice, he and his team issued on his website weeks ago.
With gas and electric bills set to rise across the UK because of the energy price cap, people in the UK have just hours left to take the Money Saving expert’s advice.
The energy price cap is set every quarter by the country’s energy regulator, Ofgem.
The energy price cap limits the amount that a supplier can charge for their default tariff, including the ‘standing charge’, which is the daily amount you have to pay for your supply.
It also relates to price for each unit of electricity and gas you use, measured in pence per kilowatt hours, or p/kWh.
Currently, the price cap stands at £1,568 but that is set to rise by almost £150 per year as of Tuesday, October 1.
The MSE predicts that the price cap will only come down marginally over the next year, but you can ‘fix’ your energy prices, meaning that the cap would remain where it is now for the next 12 months.
Lewis said: “If you find a fix for at least two percent less than the new (October to December) price cap (or up to eight percent more than the current cap), it’s predicted you’ll save over the year compared with staying on the price cap.”
Analysts at EDF and Cornwall Insight predict you will pay 11 per cent more in the next year if you stay with the price cap fluctuation, so fixing your bills is the best option when it comes to saving money.
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Lewis continued: “While it’s called a cap, there is NO CAP on what you pay, what’s capped is the standing (e.g. daily) charge and how much they can charge for each unit of gas or electricity you use.
“It only applies to firm’s standard, i.e default tariffs, the rest aren’t capped, and they can charge more or less.
“All firms standard (capped) tariffs price at or very near the cap max, so its not really a cap. In reality the regulator is setting a fixed price and its charged.
“The wholesale rate used to set the cap are not the spot rates (ie the rate you can buy energy today) as especially with gas we’ve no storage. The regulator uses long term buy-ahead wholesale rates to set the cap, as its prime focus is energy security.
“On top of the wholesale rates, it then adds a host of factors on it (network costs, distribution etc), including a set amount of profit, to come up with the cap.”
