MARTIN Lewis has issued a warning to millions of households who could save money on their energy bills as prices rise.
Ofgem‘s latest price cap comes into effect today, meaning the average household on a dual fuel standard variable tariff paying by direct debit will see their bills rise from £1,568 a year to £1,717 a year.
It’s worth noting what you will actually pay depends on your usage and the number of people in your home.
However, consumer champion Martin Lewis has issued a reminder to households they can still save money on their bills despite today’s rise.
Posting on X earlier today, he said: “It’s time to rename the energy Price Cap, the energy Pants Cap.
“No one, who’s capable of switching, should be on it right now.”
The consumer expert went on to explain how households can pay less than the price cap through three main routes: fixing at a lower price, getting a discounted tariff or opting for a special EV tariff.
Here’s everything you need to know about all three options.
A number of energy firms have brought fixed deals to the market cheaper than the current price cap.
A fix is when you lock in a set price for a certain period which is usually 12 months.
The reason there are fixed deals available cheaper than the price cap is that the price cap is decided months before it comes into force.
The new price cap from today was decided based on wholesale energy prices between May and August which were much higher than now.
But as wholesale prices have fallen since August it means suppliers can offer deals now that are less than the new price cap.
Energy prices are also predicted to fall by just a few per cent in 2025 meaning fixing now could save you money overall over the next year.
There are a number of fixed deals to choose from that are up to 9% less than the October to December price cap, including from Outfox the Market, E.On Next and Ovo Energy.
You can find out the best deals for you by going on price comparison sites like Compare the Market, MoneySuperMarket or MSE’s website.
Martin has previously said anyone who is “risk averse” should lock in a fixed deal now, but there are some drawbacks.
You can end up paying more on a fix than a standard variable tariff (SVT) if wholesale costs fall.
Plus, fixed deals come with exit fees if you want to leave them earlier than the agreed period.
Below are the current best fixed deals on the market, though remember that deals can launch or be pulled at any time.
Another alternative to staying on the price cap is a variable discounted tariff.
These deals offer you a fixed discount off the price cap standing charges or unit rates for a set period of time.
Standing charges are fixed daily fees charged to customers regardless of their usage and cover the cost of maintaining the energy supply network, taking meter readings and government schemes.
For example, E.On Next’s Pledge tariff is offering new and existing customers who pay by direct debit a 12-month tariff priced £50 below the price cap.
Meanwhile, EDF Energy is offering new and existing customers a 12-month tariff priced £50 below the price cap, with standing charges discounted so you will pay less regardless of your usage.
“Time of use” tariffs charge you different rates based on the time of day.
They usually charge you a cheaper rate at night and a more expensive one in the day.
But they can be useful if you work night shifts or want to charge your electric vehicle (EV) overnight.
One major drawback to these types of deals is that the rates you are charged during peak hours can be quite pricey though.
Octopus Energy‘s Agile Tracker tariff is one other option.
Rates on this tariff change every half an hour based on nationwide demand which means if you use a lot of energy at off-peak times it could be worthwhile.
Octopus Energy is currently only recommending those with solar panels, home batteries and EVs opt in though due to volatile wholesale prices.
This is because these households can more easily shift their usage outside of peak periods.
The tariff is electricity-only as well which means you would need to find another tariff for your gas.
OFGEM reviews the cap on unit rates for those on the default tariff every three months.
This means the energy price cap can move up or down at four different points in the year.
Price cap rates are updated on the following dates:
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