Martin Lewis has given a serious warning to anyone considering cancelling an energy direct debit before the price jump in April.
With the cost of living (opens in new tab) rising, many families are looking at ways they can save money on fuel (opens in new tab), while others want to know how to pay off debt fast (opens in new tab) and aside from staring the 1p savings challenge (opens in new tab), now billpayers are considering cancelling energy direct debits to "keep in control"
But the TV presenter took to Twitter to warn his followers about the pitfalls of doing this. It read, "WARNING! Many talking about cancelling energy Direct Debits to 'keep in control' and just pay when billed. Yet be aware that's usually charged at a HIGHER RATE. Price cap (for someone with typical use) paying by Monthly DD £1,971, Prepay meter £2,017, Quarterly bills £2,100."
As a result, keeping a direct debit active could save households up to £129 a year by opting to keep paying direct debit rather than a quarterly bill.
On April 1st, the energy price cap for around 22 million users will increase. People on default tariffs who pay by direct debit will see their yearly bill rise by £693, from £1,277 to £1,971. Customers who pay in advance will see their bills rise by £708, from £1,309 to £2,017.
Despite a desire to save money on energy bills (opens in new tab), the inevitable rise is largely owing to a record increase in global gas prices (opens in new tab) over the last six months, with wholesale prices quadrupling in a year.
And while the UK is changing where it gets some of its gas and oil from (opens in new tab), this cap sets the annual cost of energy for the ordinary household and will jump a whopping 54% growth.
Homeowners recently switched energy suppliers to get the best rates (opens in new tab), but Martin Lewis warns that there is "no market fix" and that further price spikes are on the way.
The cheapest fix currently costs 68 % more than the current price cap, which is significantly more than the April 1 price cap.
For anyone concerned about rising costs, a post on Money Saving Expert's website (opens in new tab) has been published, providing even more tips on how to manage with rising energy bills.
If you're having trouble paying your bills, Martin says the first thing you should do is notify your energy provider as soon as possible. Your provider is required to assist you under Ofgem standards, which normally include establishing a payment plan that you can afford.
Anyone in need of assistance or concerned about their energy costs can turn to charities and organisations like National Energy Action (NEA) (opens in new tab), NI Energy Advice (opens in new tab), Citizens Advice (opens in new tab), and National Debt Line (opens in new tab) for free advice.