Martin Lewis' Money Saving Expert (MSE) team has urged Brits to "lock in" on an energy deal now to avoid price rises this winter.
Last week, Ofgem announced that its price cap for those paying by direct debit will fall by 7% in July to an average of £1,568 - down from the current £1,690. In the latest MSE newsletter, Martin Lewis' team explained that around 85% of homes in the UK are on a "price cap standard tariff".
If you are not, the MSE team says you will be on a "fixed rate or special tariff" and if you are not sure, you will likely be on a capped tariff. This means for every £100 you spend on energy - from July you'll typically pay £93. However, Martin's team warned that energy bills are set to rise again in October. If it does rise by the predicted 12%, then for every £100 you spend now, you'll pay £104 from October.
To avoid the hike of a predicted 7%, the MSE team urged Brits to "fix now" to undercut the rise and lock in a "year-long 9% fall". The team explained: "The next in October is now predicted to rise 12%. This makes the current fixed deals out there, some of which are already cheaper than the July Price Cap (do a Cheap Energy Club comparison to find yours) look attractive, as you can likely save cash, and get the added bonus of certainty."
The MSE team highlighted three energy deals which were currently the "cheapest standalone fixes" at the moment. The first was Ecotricity Green's one-year fix which was 9% below the current price cap. This deal is available to both new and existing customers however there are only 2,000 switches available.
The MSE team highlighted Octopus Energy's 12-month fix which is 7% below the price ca, and Ovo Energy's fix which was 5% below. Octopus' deal is for dual fuel and electric customers only and Ovo Energy's is only available to direct debit customers only, and you do need a smart meter.
When Ofgem's price cap was announced, Martin noted that standing charges would remain high and were "virtually unchanged" compared to Ofgem's April figures.
The standing charge is a mandatory payment on energy bills, and it is paid no matter how much gas and electricity a household uses. It is used to pay for things such as the upkeep of the energy grids and the amount varies depending on where you live in the UK. He added: "So higher users will see a proportionately bigger cut than lower users, for direct debit from July..."
Martin shared that the standing charge for electricity would now sit at 60.12p a day, which is up from 60.1p before. The standing charge for gas will be 5.48p down from 6.04p before. Martin added that the standing charge consultation launched by Ofgem last year would be published by the summer adding: "whenever that is".