Martin Lewis is alerting householders about their energy bills, saying they are set to be higher this winter despite the recent drop in the Ofgem price cap.
The financial expert warned people to expect bills to be higher than last winter as they will not be receiving the £400 energy bills discount from the Government, in £66 or £67 a month instalments. Martin Lewis was speaking on his ITV show this week, saying “we are far from through” the energy issue, reports The Express.
The creator or advice website MoneySavingExpert.com said: “A typical household in the UK will be paying more over the next six months than it did at the same time last year, when we were talking about nightmare energy conditions. So we are far from through what is happening.”
He told viewers that bills are “still well over double” what they were prior to the cost of living crisis and the spike in energy prices. The Ofgem price cap decreased from the start of October, with energy bills for a household with a typical usage falling from £1,976 a year to £1,834 a year.
But Mr Lewis warned that we should focus on the actual unit rates for energy, which is what the price cap actually applies to. Under the latest rates, a household on a direct debit dual fuel tariff is set to pay the following:
- Standing charge – 53.37p per day
- Unit rate – 27.35p per kWh
- Standing charge – 29.62p per day
- Unit rate – 6.89p per kWh.
When an audience member asked the financial journalist if it is worth going for a fixed rate deal – a type of tariff which more suppliers have started to offer – he mentioned predictions from energy research and analyst company Cornwall Insight about what will happen with the price cap over the next year; showing it will increase by one percent.
“Based on the current predictions from Cornwall Insight, it’s worth fixing at a maximum one percent above the current rate,” he said. He added that most fixed rate deals are on offer only to existing customers – so there is little point searching for them on comparison websites – and that they change regularly.
He also answered an email from a viewer who reported her direct debit had more than doubled, which she thought due to the standing charges increasing under the latest price cap. He called increases to the standing charge a “moral hazard” and said: “Lower users are actually being punished because they can’t make big savings from cutting usage.”
He cited one supplier, Utilita, which does not have any standing charges, although it makes up for this with a comparatively higher unit rate.
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