Published On: Tue, Jan 23rd, 2024

Martin Lewis praises ‘only tariff worth looking at’ in energy bills cost-cutting advice | Personal Finance | Finance


Martin Lewis praises E.ON energy in cost-cutting advice

With prices set to drop again in April, Money Saving Expert founder shared the “only tariff” worth looking into for those considering a fixed rate.

Speaking to , Mr Lewis said: “As for switching, it’s all changed in the last couple of weeks.

“Energy prices went up five percent but the current prediction – and we’re over halfway through the assessment period for the next price cap that hits in April.

“Then for July, they’re going to come down by four percent on top of that so, if you’re on the price cap, it’s looking like prices are going to drop quite substantially in April. I’m not saying they’re going to be cheap, just that they’re going to drop.

“So when people talk to me about fixing – should I lock in a tariff – the cheapest fix that you don’t have to switch over other utilities or get boiler cover with, is four percent cheaper than current prices.

Martin Lewis

Martin Lewis praises ‘only tariff worth looking at’ in energy bills cost-cutting advice (Image: GMB/ITV)

However, the Money Saving Expert noted: “The only tariff that I would suggest people have a look at and see if it’s right for them is the E.ON Next Pledge tariff, which is available not just to E.ON customers, you can switch to it.

“It’s basically the price cap, with a three percent discount. So for the next year, whenever the price cap moves, this one is three percent cheaper.

“So if you’re going to be sticking on the price cap anyway, you may as well stick on the price cap but pay three percent less for it. That’s the E.ON Next Pledge.”

At the time of his appearance on the show, forecasters expected a 14 percent drop in prices, prompting Mr Lewis to add: “But, we’re looking at a 14 percent drop in April. So, based on current predictions, no fixes on the open market look worthwhile.”

But it now appears that prices will plunge by 16 percent, the figure put out on Sunday (January 21) by the latest energy price cap forecast.

Cornwall Insight, which analyses energy markets, based its latest calculations on market closing prices.

The analysis firm says that the average bill for a typical duel-fuel household could drop by £308, forecasting a fall from £1,928 to £1,620.

Energy regulator Ofgem sets the price cap, which enforces a limit on what suppliers are allowed to charge domestic customers per kilowatt hour of energy useage.

The energy price cap also sets a limit on the daily standing charge which funds the cost of supplying energy to the home in question.

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Energy bills could drop by 14 percent in April in line with current price cap predictions (Image: Getty)

Richard Neudegg, director of regulation at Uswitch.com, said: “The prospect of the price cap falling further than expected in April is positive, but it’s little comfort for households struggling through the coldest time of year with high energy bills.

“These predictions suggest prices in April will be 16 percent lower than they are now, with the hope of a further seven percent drop in July.

“Consumers shouldn’t count their chickens yet, however, as the further into the future predictions look, the less certain they are, given the wholesale energy market can change quickly.

“No one will know for sure how much they will be paying in April until the new price cap level is announced in February, making it hard for households to budget in these challenging times.”

In his appearance on the January 9 episode of Good Morning Britain, Mr Lewis also shared additional energy bill “house-keeping” people should be doing, Mr Lewis said: “First of all, those on direct debits should check how much energy credit you’re in. Up to a couple of months of direct debit’s worth of energy credit is appropriate.

“If you’re more than that, you need to be questioning whether they’re sitting on too much of your cash. I would also suggest that anyone who has an energy direct debit right now gets on to a direct debit calculator.”

Because prices have gone up, Mr Lewis said households’ direct debits may have changed and it may be disproportionate too high, or it could “in some cases” be too low.

Mr Lewis continued: “I’d get on there and see, is your direct debit fair? Do they have too much credit? Let’s remember, right now people are paying – in practice – more for energy than ever before.

“Even more than last winter’s horrible time because, the five percent rise we’ve just had, we don’t get what everybody got last winter, which was £66 or £67 a month of their bills.”

Mr Lewis’ advice will be welcomed by millions of Britons already struggling to pay their energy bills after the new Ofgem price cap came into force.

The price cap increased on January 1, meaning people up and down the country face paying more for their energy usage than they were last year.

 

Families using the typical amount of gas and electricity for a househole will see an increase of £94 hit their annual bill in 2024.

Ofgem, which regulates the energy industry in the UK, confirmed in the New Year that people paying by direct debit face bills rising from £1,834 to £1,928.

There are about 29 million people who are on the price cap, but those customers have been reminded that the price cap doesn’t represent a total cap on what an individual can end up paying for their energy useage.

Rather, the Ofgem price cap just limits the amount that people pay for each unit of gas and electricity they use.

The price cap also sets a maximum daily standing charge, which is what somebody pays just to have their home connected to the grid.

Good Morning Britain airs on weekdays from 6am to 9am on ITV and ITVX.



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