The consumer champion has issued a warning to people on the standard tariff as prices are set to soar from October 1. Ofgem has confirmed that the level of the energy price cap for millions of homes will rise by 10%
Martin Lewis is putting out a rallying call to those on the standard energy tariff, prompting them to lock in a fixed deal pronto, with energy bills set to inflate by 10 percent from Octobers outset. Ofgem gave the green light that from the 1st of October, typical annual energy costs for countless homes on the standard tariff will rocket from £1,568 to a steep £1,717 - a surge of £149 throughout the upcoming year.
The MoneySavingExpert.com (MSE.com) guru has cautioned that with the fresh price cap, many will cough up nearly double what they forked out pre-crisis. Martin broadcast a message on social media explaining that your current energy spend of every £100 will swell to about £110 from October, urging everyone to pinch pennies by making the switch, even if it ramps up your September statement.
He imparted this advice: "People can and should save by switching. The cheapest year-long fixes on the market right now are about 7 per cent less than the new October price cap, but they mightn't be around long. That looks a good deal, as it's currently predicted once rates go up they won't come down."
Yet, the consumer advocate sounded a note of caution regarding the leap to a new plan. He counselled: "Don't just jump on any fix though - if you're going to lock in you want to grab the cheapest for your use and location, so use a whole-of-market comparison, like MSE's Cheap Energy Club, and find out who will let you fix for less."
"Alternatively, deals like E.on Next's Pledge, or EDF Ensure are effectively discounted trackers, where they move with the price cap, but the unit rates or standing charges are guaranteed to be lower. And for more sophisticated energy users, the Octopus Agile and Tracker tariffs, where prices move rapidly, can be far cheaper.", reports the Daily Record.
Martin underscored the advantage of fixing in a rate before the next price cap change on 1 January, highlighting predictions of an impending rise by industry experts.
He also cautioned that pensioners not receiving Winter Fuel Payments because they do not get income-related benefits such as Pension Credit could be facing the prospect of shelling out "hundreds of pounds more than last winter".
The previous year witnessed the distribution of more than 11 million Winter Fuel Payments, reaching amounts up to £600 and included a £300 Pensioner Cost of Living Payment for the past two years.
Martin stressed: "The Government must rethink Winter Fuel Payments or almost all pensioners will need to find £100s more than last winter: While energy will cost less than during last winter's crisis time, the reduction in rates compared with last year only equates to a drop of roughly £100 over the six winter months for a household with typical usage."
"Last year, pensioner homes got up to £300 extra per household cost of living support - that's gone, and its loss alone is far bigger than the savings made by slightly lower rates. Piling on top of that is the Government's new decision to means-test Winter Fuel Payments, that will leave all except usually those who claim Pension Credit missing out on a further £200 to £300."
Martin added: "While there's a strong argument for ending the universality of Winter Fuel Payments, eligibility is being squeezed to too narrow a group. Those just above the thresholds will be hardest hit."
He continued: "I'm due to meet the Chancellor in a couple of weeks, and will then be urging her to look at methods to widen eligibility - such as to homes in Council Tax bands A to D - an imperfect but workable proxy for lower household incomes."
The daily standing charge for electricity will see a slight rise to 60.99 pence (24.50 pence per kWh), as will the daily standing charge on gas - 31.66 pence (6.24 pence per kWh). However, a new paper by Ofgem has put forward proposals that could slash annual standing charges by up to £100.
These charges currently sit at around £338.
The paper suggests options to reduce the standing charge by between £20 and £100 per year by transferring parts of these fixed supplier costs to the unit rate (the price paid for every unit of energy used).
