Martin Lewis, renowned money-saving expert, shared insights and strategies on how UK customers can save on energy bills during the latest episode of The Martin Lewis Money Show Live on ITV.
According to expert analysis by Cornwall Insight, the Ofgem price cap is expected to decrease by 15%, or £293, to £1,635 annually starting April 1.
Currently, households pay an average of £1,928 yearly for gas and electricity under the Ofgem-regulated tariff, which adjusts four times a year.
E.ON Next Pledge – A No-Brainer Move:
Lewis emphasized an “easy winner” for consumers to beat the price cap, pointing to the E.ON Next Pledge.
This variable tariff, available to existing customers or those willing to switch to Direct Debit, consistently stays 3% below the Ofgem price cap.
Regardless of cap fluctuations, it remains 3% cheaper for a year, offering a straightforward way for consumers to save on energy costs.
Locking in Prices with Fixed Deals:
Lewis also discussed the benefits of opting for fixed-rate deals, where customers lock in a specific price.
He highlighted the British Gas Price Promise, priced at £1,699 annually for the average dual-fuel household.
This deal positions itself £229 below the current Ofgem price cap of £1,928, with a commitment to beating the expected April cap reduction to £1,620.
However, the Price Promise deal spans 15 months, offering a rate below the cap only for the initial five months.
Potential Risks and Exit Fees:
While the British Gas Price Promise appears promising, Lewis cautioned customers about potential risks after the initial five months.
Beyond this period, the deal’s rates might surpass the Ofgem price cap, and customers opting out prematurely would face exit fees of £75 for both gas and electricity.
The fixed-rate tariffs, historically more economical, have become less prevalent as energy prices surged in late 2021.
Analyst Projections and Price Cap Adjustments:
Cornwall Insight’s energy analysts anticipate a 15% reduction in the price cap to £1,635 annually from April 1 for a home with average energy consumption, direct debit payments, and a variable-rate tariff.
The price cap, affecting over 80% of UK households, undergoes resets in July and October.
Cornwall Insight predicts further reductions to £1,465.07 in July and a subsequent rise to £1,523.95 in October.
Navigating the Energy Market:
Martin Lewis’ guidance provides consumers with actionable strategies to navigate the dynamic energy market, enabling them to make informed decisions and potentially reduce their energy expenses.