Martin Lewis has spoken about a new electricity supplier that is “definitely worth having a look at” as its tariff is currently 13 percent below the Ofgem price cap.
Fuse Energy is an app-based energy supplier supplying only electricity which offers a tariff of £931 a year based on typical use, which is £136 less than the price cap, at £1,067 a year.
The supplier has consistently offered rates of six percent below the Ofgem price cap but updated its rates to reflect the new price cap coming into effect from October, so its rates are currently 13 percent below the price cap.
Martin Lewis told listeners to his BBC podcast: “It may well be worth giving it a try. I’d probably argue it’s best for those people who are always regular switchers and understand the system rather than someone who tends to be with the same company for a long time.
“If you get what energy switching is all about, it’s definitely worth having a look at and doing a bit more reading up.”
However, Mr Lewis warned consumers that there are some risks involved as the supplier is new to the market.
He said: “Fuse is a new, small supplier that only has 6,000 customers so I have zero feedback on its customer service.
“I also think if millions of people rushed to it, it wouldn’t be able to cope and there would be problems, customer service wise or financially.”
With the new price cap from October, energy bills including gas and electricity based on a typical household’s use will fall from £2,074 a year to £1,923 a year.
Jonathan Brearley, CEO of Ofgem, said when the new price cap was announced: “There are signs that the financial outlook for suppliers is stabilising and reasonable profits are returning.
“With the small additional allowance we’ve made to Earnings Before Interest and Tax (EBIT), this means there should be no excuses for suppliers not to be doing all they can to support their customers this winter, and to reinforce this we’ll be introducing a consumer code of conduct which we will look to have in place by winter.”
Kevin Brown, savings specialist at Scottish Friendly, warned households will see little benefit despite the price cap fall.
He explained: “The energy price cap will drop marginally from October, but the truth of the matter is it remains well above levels seen before the cost of living crisis.
“The average household will be paying over £500 more than they were in October 2021.
“On top of that, households will not be receiving the £400 discount that they did last winter, which means a lot of people are likely to be no better off.
“It’s going to be another tough few months for a lot of families who, unlike last year, are also grappling with higher mortgage rates and other increased borrowing costs.”
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