Martin Lewis has urged people on fixed energy deals to check their energy contract immediately after major changes at the weekend. The founder of MoneySavingExpert posted on Twitter on Tuesday, July 4, after households in the UK saw energy bills fall for the first time in two years.
The energy price cap sets how much the typical household pays for their gas and electric and fell to £2,074 on Saturday, July 1, putting it below the government's energy price cap of £2,500. It means a reduction in the typical energy bill for the first time in two years after soaring prices.
But the weekend changes means many households on fixed energy deals could see a sharp increase in their bills due to the ending of the government's energy price guarantee. To get all the latest money-saving news straight to your inbox twice a week sign up here.
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Under the energy price guarantee, introduced last October to stop customers facing monthly bills of over £3,500 a year, the government provided a support rate discount to all households with a domestic gas and/or electricity contract, bringing the typical household down to around £2,500 per year. It was extended from April to the end of June but has now expired.
Speaking on Twitter, Mr Lewis explained that this would have implications for many households who locked in fixed rate deals, as they will no longer benefit from the price guarantee as of July 1. He said this meant some customers might have seen their rates jump to "substantially more" than the new price cap rates, which apply until the end of September.
Mr Lewis said this usually applied to those who fixed their bills around one year ago. He said people in this situation should check now to see if their rates have changed. "If so, and it's materially higher than the cap rates, you should consider ditching the fix and moving to your provider's price cap (though factor in any early exit penalties)," he wrote.
The average direct debit rates for energy under the price cap are as follows:
Electric
Standing charge: 53.0p/day
Unit rate: 30.1p/kWh
Gas
Standing charge: 29.1p/day
Unit rate: 7.5p/kWh
