Martin Lewis has shared some of his expert advice on whether people should go for a fixed rate mortgage or not.
The financial guru has also offered his opinion on Universal Credit claims and energy bills, reports Wales Online. The TV star, alongside his team of money saving experts, have also been looking into the wider financial situation for 2023, and offering tips on how to handle your cash.
Martin was honoured at the National Television Awards in 2022 for his vital work in offering money advice and warnings to those who have been struggling the most in today's turbulent times. After this, he looked back on a "pretty horrible year financially" and warned of a "brutal" year ahead.
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So, here is Martin's latest advice on key financial issues, as we head into the new year.
Fixed rate mortgages
After speaking to mortgage experts and financial market analysts about their 2023 exceptions, MoneySavingExpert (MSE) found that the overall consensus is that rates on fixed rate mortgages are likely to fall next year.
Due to this, tracker mortgages could be an ideal solution for borrowers in the medium-term who are waiting to see where the market is headed in 2023.
Interest rates on fixed rate mortgages increased sharply over 2022. While the average rates on a two-year fix did recently dip back under six per cent, this still remains significantly higher than the average rates of 2.34 per cent in 2021.
The MSE website states that variable rate mortgages such as trackers and discount deals are becoming more popular. This is due to the rates on these being much better than those on fixes.
According to Ray Boulger, while fixed-rate deals made up 95 per cent of new mortgages until recently, this figure is expected to drop to around 75 per cent in 2023.
Energy bills
Gas and electricity bills continue to be a struggle for UK residents, after Chancellor Jeremy Hunt confirmed last month that the average household bill would rise to £3,000 as of April 2023.
This is a jump from the previous cap of £2,500, and much higher than the price cap of £1,277 this time last year, but is also much lower than the £3,739 that energy analysts at Cornwall Insight predicted.
The Energy Price Cap Guarantee will also be extended further than April 2023, and it was announced that an average of £500 in support will be available for each and every UK household.
Speaking on the Martin Lewis Money Show, he said: "Currently, the energy price guarantee is set on £2,500 a year for somebody who has typical usage - use more you pay more, use less you pay less. From April, it will be going up to £3,000 on typical energy usage.
"But what's important to understand is that, staggeringly, is a subsidised price. That isn't based on wholesale prices, that's subsidised.
"Now look, if we'd stayed on the old price cap system, we would have been on way more now on the old price cap system than the energy price guarantee.
"The difference is what the Government contributes to everybody's energy bills, the poorest and the richest in society - I'll leave you to make your own minds upon that."
Martin also warned that without the £400 energy discount next winter, households will likely be paying on average £3,000 a year on their bill.
He explained: "You've all got something to help your energy bills this winter; £67 a month, over six months, which is £400. So let's get rid of that and let's look at the £400 that you've got this winter.
"That effectively reduces your energy bills and everyone's energy bills, but that is not being paid next winter.
"So for somebody on typical use, pro-rata, they're paying the equivalent of £2,100 a year, this winter. Next winter, it will be £3,000.
"Energy prices nearly doubled from last winter to this winter, and they will be going up again by 43 per cent - on average - next winter.
"And if you use less, losing that £400 has a bigger effect, and your percentage rise, I'm afraid to say, will actually be more."
Government grants
Households are also being urged by Martin to check if they are eligible for any Government grants. The money guru also noted that social tariffs could be introduced to make things easier for those who don't typically switch.
Martin said: "This winter we're in the middle of getting those £66 or £67 a month - you should be getting them if you pay for electricity.
"However, that won't happen next winter. For those on benefits and tax credits, the £650 has mostly been paid - everyone who's eligible should have got it by 30 November, the vast majority have got that now.
"Next winter, that's going up to £900 - so it covers some of the gap of the lost £400 for those on benefits but not all of it.
"For those with disabilities, you should have had £150 and you get the same amount next winter.
"For state pensioners, the £300 that goes on top of the Winter Fuel Payment (which is £100 to £300), that starts being paid from 23 November and you should have got it by the middle of January 2023 - that's also going to be £300 next year."
He added: "The energy price guarantee in 2023 may become volumetric. What that means is you'll get cheaper rates up to a certain amount of usage and if you use more, then the rate will get higher to encourage people to use less, more of a subsidy on a lower rate - it's a consultation.
"Then from April 2024, I suspect they're hoping we go back to that competitive switching market, they want to look at a social tariff, something I've campaigned on for years.
"So I'm pleased to see that if we do get back into that situation, that means those people who never switch and can't switch and don't understand it, you know - someone with onset dementia who's never going to engage in the competitive market - would automatically be put on a cheaper tariff and will not have to switch anymore."
Households that earn under £40,000 a year have also been informed that it is well worth spending approximately ten minutes checking if they are entitled to further financial help.
Martin said millions of households could meet the eligibility requirements to get Universal Credit without realising it, and a simple benefits calculator could help people to find out.
He said: "There are up to seven million of you who are eligible and who are missing out. I am not, repeat, saying you will get it. I am saying it's definitely worth 10 minutes of your time to go onto an online benefits calculator- there are a good few of them out there - and it should take about 10 minutes to put all of your details in to see if you are due."
Benefits calculators allow households to input their income and other details to check their eligibility for benefits.
The online assessment takes around 10 minutes to complete.
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