His advice is simple – for now, do nothing
Martin Lewis has warned millions of energy customers that they should not lock into a fixed deal right now, advising that people allow their tariff to roll over to the energy price cap.
The MoneySavingExpert has told Brits to simply “do nothing” as the energy price cap – which sets a limit on the rates customers pay for each unit of gas and electricity – is currently 30 per cent cheaper than the best value fixed deals on the market at the moment.
His advice comes as wholesale energy prices have soared in recent weeks, causing 13 gas and electricity providers to go bankrupt.
Lewis warned that energy companies will be desperate for people to switch to fixed deals but that for now customers should not act.
Writing in the latest MoneySavingExpert newsletter, Martin said: “Expect to get fancy letters extolling the virtues of fixing – tapping into switchers’ instincts as if these were normal times, when that was the right thing to do.
“No surprise, they are desperate to get people off the price cap.
“Yet as a consumer, fixing now is almost certainly NOT the right thing to do (I can’t say 100% without a crystal ball, but it’s my very strong suspicion).
“The cheapest fixes cost 30%+ more than the price cap – a huge premium, when you consider the price cap is in itself fixed until April. If you’re on it you’re essentially locked in at the cheaper price over the high-use winter period.
“So DO NOTHING, and if you’ve never switched, you’ll be on the price cap. If your fix is coming to an end, or your provider has gone bust, DO NOTHING and you’ll automatically be moved to the price cap.”
WARNING. Pls RT. Beware your energy firm trying to push you to fix again when you come off a cheap fix.
They're desperate to push people off the price cap – where they're forced to supply energy below cost. The price cap's the cheapest poss tariff; fixes cost 30%+ more
— Martin Lewis (@MartinSLewis) October 20, 2021
If you have never switched energy supplier or have recently been moved over to a new provider after your old energy firm went under, you should be automatically placed on the energy price cap.
The industry regulator Ofgem raised the price cap for standard and default tariffs from £1,138 for a typical user to £1,277 – an increase of £139.
Meanwhile, the price cap for pre-payment customers rose by £153 from £1,156 to £1,309.
Around 50 per cent of homes are thought to be on variable energy tariffs.
Related links:
- Martin Lewis issues ’emergency’ energy warning to thousands of households
- Treasury source denies talk of energy crisis support package
- France threatens to use energy supply to ‘put pressure’ on UK to comply with Brexit deal
