Martin Lewis issues advice on how to save money ahead of energy price cap hike

It might come in handy

By the regulator, the latest rise was blamed on “volatile global gas markets” caused by the ongoing Middle East conflict.

The change will impact around 65% of households in England, Scotland and Wales, which will push prices to their highest level in three years.

“High international gas prices are continuing to drive energy costs in the UK. We welcome the Government’s intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter”, Director general of markets at Ofgem, Neil Kenward, said in a statement.

Martin Lewis on who will get affected and how much it will cost them

However, why the turbulence may not end here was explained by financial journalist and broadcaster Martin Lewis on X.

“The cap only lasts three months and changes again on January 1, 2027, and sadly it’s currently predicted to rise substantially again then, though that’s a bit of crystal-ball gazing.”

Money Saving Expert (MSE) claims it all comes down to “how risk averse you are and your current situation”, so there is a way to potentially avoid the worst of these increases.

The cheapest fixed deals available right now are about 8% less than the current cap (or around 11% less than it’ll be from October) so acting now could really pay, according to MSE.

The team says that as such, if your tariff is determined by the Ofgem price, “the risk averse thing to do right now is to fix your energy, as this will lock in your rates for a year.”

Martin also warns that “fixes were quite a bit cheaper about six weeks ago”, so “if, and it’s a big if, things in the Middle East settle down you may be able to fix at far lower prices in future.”

Further he advises that for “someone who has been on the standard tariff for ages, then the safest thing is just to get a cheap fix now,” while “if you’re a regular fixer who’ll monitor the market, there’s a chance waiting may turn out to be better.”