From this Friday (March 30), the energy price cap is set to rise by 54 percent, which will result in average households seeing their bills rise by £693 annually. With the energy price cap set to reach a record high later this week, Martin Lewis is warning that it is too late for people to move onto a fixed rate.
Earlier this morning, Mr Lewis said: “Cheapest fix right now on the market: £2,280, which is actually more than the prediction for the October price cap.
“So it isn’t worth getting a fix today. It’s just not worth it. Stick on the price cap.”
He added: “What you want to watch for though is does your firm ever offer you a much cheaper fix deal.
“If it were to offer you a fix of no more than around 20 percent higher than the April price cap, then I would probably consider fixing for price certainty, though I can’t promise it will work.
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“That’s the line we’re on right now.
“The cheapest fixes are far more than where we think it’s going to go in October but this could all change so quickly.”
The country’s regulator Ofgem revealed that the energy price cap on bills would be hiked to £1,971 from April, which is the limit on how much providers can charge people on their energy.
This hike follows a previous energy bill rise last October of 12 percent and households only have days left to prepare for yet another squeeze to their living expenses.
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Outside of the pressure being placed on energy bills, inflation has recently hit a 30-year high of 6.2 percent, causing everyday food and utility bills to go up also.
In light of this, the financial expert explained what the cheapest fix on the market is and why it’s not worth moving to a fixed rate at the moment.
When it comes to energy tariffs, a fixed rate means that a households’ unit price for gas and electricity will not change for the duration of their plan with an energy provider.
For example, if a supplier announces a price rise, someone on a fixed rate will not see their bills go up.
Mr Lewis also warned that there are “no open markets”, suggesting comparison sites are “gone for the moment” due to the collapse of many energy providers in recent months.
Since early 2020, around 30 energy suppliers have gone bust, which has affected almost 4.5 million customers across the country.
The energy price cap rise is set to come into effect for 22 million customers as of April 1, 2022, according to Ofgem.
Those on default tariffs, who pay on direct debit, will experience a bill increase of £693 a year. In comparison, prepayment customers will see their bills go up £708 from £1,309 to £2,017.
Energy bills are rising due to external pressures in the gas market over the last six months, with wholesale prices quadrupling over the last 12 months.
Further changes to the price cap are expected in October of this year, with bills expected to hit £2,800 a year. However, this is subject to changes in the market.
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