24 June 2024 , 10:25
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Martin Lewis urged people to act over the next few days to secure a saving of up to £152 on their energy bills.
The Money Saving Expert (MSE) website founder has told Brits to see if they can lock in a cheap energy deal before the Ofgem price cap changes on Monday, July 1. The energy price cap will drop by around 7% from next week and the typical dual fuel household paying by direct debit will see their annual gas and electricity bill fall from £1,690 to £1,568 - a saving of £122.
However, because the next price cap change in October is expected to be an increase of 12%, the best way to get the very cheapest price for this year is to fix it now. Usually, energy switches are not completed - or started - over the weekend which means you only have the working days from Monday to Friday to secure the best deals before the new price cap is launched.
In an episode of the Martin Lewis podcast on BBC Sounds back in May, Martin explained: “If you look over the next year at the predicted price cap, and the price cap is what sets the rate for 90% of homes because 90% of people are on a standard tariff. You would look and say on average you will pay roughly 3% less than you do right now.
“Whereas the cheapest fix available right now is 9% cheaper. So stay on the price cap and you pay 3% less right now but go on the cheapest fix on the market, if you’re on direct debit, is 9% cheaper. So you can lock in right now and the probability if the prediction is correct is it will be cheaper than the price cap. So it looks like people should be getting a cheap fix right now. We are moving back into that fixing territory right now.”
Martin Lewis’ MSE website shares tip to get free £175 and 7% interest on savings
If you were to fix on a deal which saves 9% against the current price cap of £1,690, this would equate to a £152 saving over the course of a year. But Martin added: “Caveats, energy prices are worldwide and they change and there is no certainty here, but I would say strongly on the balance of probability right now if you were to get a cheap fix it looks like you will save money over the next year and you will at least have peace of mind when you do that, so we are at least in that environment.”