HomeLifestyleEnergy bills: Martin Lewis warning amid price cap concern – prices to ramp massively
Energy bills: Martin Lewis warning amid price cap concern – prices to ramp massively
Martin Lewis discusses 'hike' in UK energy prices
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Martin Lewis appeared on Radio 5 Live this afternoon to discuss the current energy bill crisis, which included the concern around the price cap being increased in October. He urged Britons to compare energy tariffs “right away”.
Martin Lewis spoke to the host about how prices are likely to rise in October, when the price cap is thought to be increased.
He said: “So, now this is a bit complicated because you wouldn’t have heard this anywhere else because this is future predicting.
“I have to tell you, I have never seen the energy market like this before, wholesaler prices, that’s those that the energy firms pay have rocketed.
“The cheapest fixed deals are around £100 more now than they were just three months ago and £200 more now than they were a year ago.
“Many people have been saved by switching but you don’t often hear me say this, not everyone at the moment, because prices have gone up so much.
“Now the reason you haven’t heard about this is because in the olden days, we would’ve had those big companies, your British Gas, EDF, Scottish Power, N.Power, they would’ve announced major price hikes, possibly would have even done it twice.
“Now, they have to wait until October and I suspect huge rises are coming then and that’s because firms can’t increase prices because they’re already at the energy price cap and that sets a maximum rate for standard tariffs.”
This could see many Britons paying much more during the colder months, when the heating is on more.
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He added: “The next change is coming on October 1 and the rate it is set as depends on wholesale prices in the run up six months from February to July…and that means we have a very good idea what will happen.”
Based on current run rates, the price cap is thought to rise from the current £1,138 a year for someone on typical bills to £1,250.
This is a £112 a year price hike.
Martin went on: “Expect most of the country to be hit by that because it isn’t just those big firms I mentioned earlier who are always at the price cap…. I think we’re going to see massive price rises coming in October.
“One of the big problems of this is when people are doing a comparison right now, comparison sites by law, including my own, effectively have to give you a price compared to the current rate and because companies have not put their prices up yet because the price cap hasn’t been announced, even though we know the algorithm its worked out on means price caps going to go up hugely and the companies will follow, you’re being given a saving compared to the current rate.
“But that rates only going to be with you for a couple of months because once you switch and it gets to October, the rate is going to go up hugely.”
What can you do to make sure you are not overpaying for your energy?
Martin explained: “We’re in this very difficult position for people to work out whether they should move or not but my big warning is if you’re coming to the end of your fix or if you’re on a standard tariff, don’t trust the price you’re given on price comparison sites.
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“Your saving is being massively underestimated because almost certainly, unless there’s a complete change in policy, in October, energy prices are going to ramp massively.”
The expert warned Britons that they should be doing a price comparison right away.
There are many tools available online to help you find the cheapest deal on the market, with fixed rates and variable tariffs on offer.
Martin will often share his money saving tips online and on TV.