Martin Lewis has warned consumers about energy regulator Ofgem’s Energy Price Cap increase, which will see bills rise by an average 10 per cent from 1 October.
The cap will rise from the current rate of £1,568 a year to £1,717.
It means the average household paying by direct debt for dual fuel will see their annual bill go up by £149, or around £12 a month – a 10 per cent increase.
According to to the money saving expert, it means that for the 85 per cent of homes in England, Scotland and Wales on a price-capped standard tariff, for every £100 you spend now, you will go on to spend £110.
So, the money expert warns that it means this winter almost double will be paying what they were pre-crisis.
Then, the next price cap in January is expected to rise an additional 3 per cent, to £1,762 a year for a typical household.
The current fixed deals available are a good option, as it’s likely you’ll be able to save over the coming twelve months and have the added bonus of price certainty.
Today’s cheapest standalone fix is 3 per cent more than the current Price Cap – but it’s cheaper than October’s cap, so better in the long-run.
In comparison to the price cap predictions over the next year of an 11 per cent rise, it seems a good time to fix, if you value price certainty.
MSE adds: “You could wait to see if cheaper fixes launch, though there are no certainties, and these current fixes may not be around long, so it’s worth considering fixing now.”
You can use MSE’s new ‘What will I pay from October?’ calculator to get an estimate of your energy costs from 1 October.
Additionally, there are a number of new tariffs available.
SWITCHING energy providers can sound like a hassle - but fortunately it's pretty straight forward to change supplier - and save lots of cash.
Shop around – If you’re on an SVT deal you are likely throwing away up to £250 a year. Use a comparion site such as MoneySuperMarket.com, uSwitch or EnergyHelpline.com to see what deals are available to you.
The cheapest deals are usually found online and are fixed deals – meaning you’ll pay a fixed amount usually for 12 months.
Switch – When you’ve found one, all you have to do is contact the new supplier.
It helps to have the following information – which you can find on your bill – to hand to give the new supplier.
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won’t be interrupted in that time.
Octopus Tracker & Agile (for existing customers) can be a substantially cheaper option.
Existing Octopus customers can switch to its Tracker tariff, where rates change daily based on wholesale costs.
Over the last year, it has proved to be 31 per cent cheaper than the Price Cap on average, but if wholesale rates continue to rise, it could be considerably more expensive.
The elec-only Agile tariff’s rates change half-hourly, depending on wholesale prices, and are suited to those who can change their usage quickly to make the most of incredibly cheap times.
If you’re not with Octopus, initially you could try switching to the Octopus Price Cap tariff and then switching.
Several suppliers have launched specific two-rate tariffs that offer cheaper electricity overnight for charging your electric vehicle (EV).
This is a good way to save money if your car charge costs make up a considerable proportion of your electricity use.
Cutting your energy usage obviously cuts bills.
On Friday, Ofgem also announced a consultation on options to reduce lower standing charges.
Reacting to the announcement, Martin said: “The standing charge is a daily poll tax that means everyone with gas and electricity will pay an average £338 a year from October, even if they don’t use it.
“This moral hazard penalises lower users, often many who are vulnerable, and means they will face a proportionately larger rise.
“I’ve long called for change, so welcome this long-promised consultation on reducing standing charges – though I’m slightly disappointed even the maximum proposed reduction is only £100/yr – but I’ll hold judgement until I’ve read the consultation in full.”
If you are struggling to pay your bills, it’s always worth talking to your energy firm.
