Martin Lewis urgent advice to every British Gas and E.On customer
Martin Lewis has issued some urgent advice for UK energy customers ahead of the energy price cap review in October.
The financial guru, 49, addressed concerns about soaring energy prices, after predictions that the cap could increase by nearly £1,000.
In April, energy prices skyrocketed across the country as the cap rose from £1,277 up to £1,971, and now Ofgem chief executive Jonathan Brearley has said that the energy regulator is predicting an increase "in the region of £2,800" in October, when the next annual review takes place.
After one worried customer asked Martin whether it is worth looking into a fixed rate energy deal ahead of the price hike, he outlined some useful advice for those who are customers of firms such as British Gas and E.On.
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The MoneySavingExpert.com founder explained how there are currently no open-market rates that are cheaper than the current price cap, however you could potentially be offered a cheap rate from your existing energy provider.
Speaking about the next price cap review, he said: “[The price cap] is going to go up 42%, we’re predicting in October – and then even though the new price cap only lasts three months, the latest estimates I’ve had from analysts is the January price cap for the next three months is going to be the same.
“So we’re expecting it to be around £2,800 until next April – it’s horrible isn’t it – then it is going to drop a little bit."
Martin continued, explaining how you could possibly strike up a deal with your provider, adding: “When you plug all that in to where we are now – four months on this price cap, then six months on the next price cap – effectively, if you can find a fix below around 30% of the current price cap, then it’s probably worth doing.
“You can add 5% on top of that because you get price assurity of knowing what your prices are.”
He went on to explain how energy firms such as British Gas and E.On are reportedly offering existing customers fixed rates below 30% of the current price cap.
These rates are not advertised online however, and you must be an existing customer to access them.
Martin said: “We’re seeing existing customer fixes where an existing company is offering you a cheap fix.
“They don’t have to publish those rates, unlike those open market ones, so I don’t have them. I ask people to feed them in and we estimate them
“I believe there is an E.On two-year fix that people are being offered and British Gas one-year fix that people are being offered that are within less than 30%. If you’re being offered those, you may want to look into it.”
In April, the energy price cap increase by a whopping 54%, with those on default tariffs by direct debit seeing an increase of £693 per year.
Around 22 million people in the UK pay their energy costs using the Ofgem price cap, which is designed to ensure customers pay a fair price for their energy and to stop companies from attempting to make excessive profits.
Speaking to the Business, Energy and Industrial Strategy Committee on Tuesday, Jonathan Brearley explained how "conditions have worsened in the global gas market since Russia's invasion of Ukraine", before outlining the predictions.
He said: "This is uncertain, we are only part way through the price cap window, but we are expecting a price cap in October in the region of £2,800."
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