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Daily Mirror
Daily Mirror
Business
Sam Barker

Martin Lewis gives advice on which energy bill to pick as price cap rises

MoneySavingExpert founder Martin Lewis has said households should look at fixed-rate energy deals to see if they can save money before gas and electricity prices rise.

Average energy bills will soon set to hit £3,549 a year as regulator Ofgem raises its price cap in October.

Speaking before the cap rise was confirmed, Mr Lewis said it could be worth seeking a new fixed-tariff energy deal before October.

It could be worth locking in now, Lewis said (Ken McKay/ITV/REX/Shutterstock)

Commenting on his website, the consumer champion explained that no fixed tariffs are meaningfully cheaper than the current price cap - but there are some cheaper than predicted upcoming rates

He said: "If the predictions are right, on average you'll pay 117% more over the next year than you do now.

Are you worried about rising energy bills? Let us know: mirror.money.saving@mirror.co.uk

"If you're offered a year's fix at no more than 115% above your current price-capped tariff, or 120% more if you strongly value budgeting certainty, it's worth considering."

Mr Lewis added that one risk of grabbing a fixed offer now is not knowing who the next Prime Minister will be from September 5 and what measures they might introduce to tackle the energy bill crisis.

He expects there is only an "outside chance" that anything Liz Truss or Rishi Sunak implemented would reduce the price cap.

The price cap being cut would not help anyone on a fixed deal anyway.

Mr Lewis also reasoned that consumers could find themselves subject to a price cap anyway if their energy firm went bust in the future.

Since energy bills started to rise, the MoneySavingExpert founder has normally advised most UK households to pick variable rate deals over fixed ones.

Unless Brits could find a fix no more than 17% higher than the rates they were paying, Mr Lewis often advised billpayers to "do nothing" and stick with variable deals.

But his opinion has changed as energy bills will rise in October - and likely go up further in 2023.

Analysts at Cornwall Insight are predicting the Ofgem price cap could hit £5,386.71 in January, before rising again to £6,616.37 in April.

This means households could end up paying roughly £551 per month on average - although the April prediction is less certain than the January figure.

The news has sparked more calls for the Government to take further action in supporting households - with the price cap rise typically £750 more per year than help measures in May were based on.

Cornwall Insight said: “A key focus for the next Prime Minister and for Ofgem must be protecting consumers, and the wider economy from the impact of this rise.

“There are several avenues that can be explored including a review and expansion of the current support package of at least £400 per household.”

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