Martin Lewis has offered households advice on whether it is more cost-effective to switch to a new fixed price energy deal or remain on your current tariff, where the price you pay is governed by the energy price cap.
Energy prices have recently started to fall after the energy price cap dropped by 17% as of July. But while prices are dropping, they are still more expensive than before the energy crisis began and many families are still rightfully concerned about how much their energy bills will cost.
There were many reasons why energy prices went up but when they did, many fixed-rate tariffs were removed from sale and any that did remain were considerably more expensive than the energy price cap. This meant that customers were unable to switch to a fixed price deal to save money on their energy bills. Those who were on fixed price tariffs that ended during the energy crisis, will have been moved to their supplier's standard variable tariff (where the price was set by the energy price cap, and temporarily, the energy price guarantee).
But now the wholesale cost of energy is going back down, a few energy suppliers have begun to offer fixed deals again, for both existing customers and new customers.
With more options now on the table, many people are asking whether they should fix their energy prices or stay on the price cap. Hearing the people, money saving expert Martin Lewis has weighed in with his valued opinion.
On his website, Martin Lewis explains that the price cap, which currently sits at £2,074 a year for a typical household paying by direct debit, seems unlikely to drop close to pre-crisis levels again unless there is a worldwide economic recession. The price cap is predicted to fall again in October, then rise up slightly in January 2024.
This means that there is very little certainty around exactly how much prices will be for those who are on their supplier's standard variable tariff. With this in mind, Martin Lewis says, "Based on current predictions, if any firm offers a fix for under the July Price Cap, that looks a decent deal. If it's the same or a little more, it may still be worth considering for the sake of price certainty.
"Of course, current predictions are just predictions, so I can't promise to be right with hindsight."
The experts working with Martin Lewis have also rounded up a handy guide showing the public which companies are offering the best deals.
They say, "There are fixes worth considering for existing customers. Octopus, Sainsbury's Energy, E.on Next, Shell Energy and British Gas all have fixed deals that are just below, or on, the level of the price cap. These could be worth considering.
"There are also open-market fixes available that are worth considering. So Energy's So Juniper tariff undercuts the current price cap, while E.on Next has a fix at the same price as the cap on average.
"There are even cheaper fixes for newbies from Utility Warehouse and Ovo, but these deals are complex as you need other products."
If you're thinking of switching, visit Go.Compare to compare the deals on offer and select the best option for you.
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