Martin Lewis has issued a warning to anyone considering switching their energy supplier in the hope of cutting their bills. The Money Saving Expert founder is urging people to think carefully before making such a move.
It comes as a major UK energy supplier has announced its first deal below the Government's energy price guarantee. Ovo is offering a one-year fixed tariff of £2,275 to existing customers - below the Government's £2,500 cap on typical energy bills.
But Mr Lewis has warned that 'people need to be very careful not to just jump on a fix because it costs less than they’re paying right now'. The new deal has been announced amid falling wholesale gas prices.
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And there are hopes that energy bills could also fall later this year, meaning a fixed price like Ovo's might not prove to be such a saving after the year has ended. In a statement, Mr Lewis added: “If you’re on a standard tariff, the rates you pay are governed by a cap.
“That cap is currently set by the Energy Price Guarantee, and will stay roughly stable until the end of June. After that, because wholesale rates - the rates energy firms pay - have dropped, it’s likely the price cap will drop, and on current predictions that means you’ll start paying 20% lower rates than now.”
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Mr Lewis added that the price is predicted to 'stay around that point' until the end of the year and into early 2024. Wholesale gas prices have fallen by around 80% since August last year, according to the Resolution Foundation, a living standards think tank.
The Government's energy price guarantee reduces - compared to the undiscounted price of energy - the amount people can be charged per unit of gas or electricity, to an annual equivalent of around £2,500 for a typical household in Britain. In his Budget on March 15, Chancellor Jeremy Hunt committed to maintaining the guarantee £2,500 from April to June, after it had been due to rise to £3,000 in April.
Ovo, which has about four million customers, reportedly said it launched its new tariff because customers desired 'the security of a long-term fix to protect them against the continuing energy price uncertainty'.
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