Martin Lewis has warned Britons their bills will be higher this winter than they were last year despite a recent drop in the Ofgem price cap.
Speaking on his ITV show this week, the financial journalist warned people their bills will be higher this winter as they will not be receiving the £400 energy bills discount from the Government, in £66 or £67 a month instalments.
He 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 also told viewers bills are “still well over double” what they used to be 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.
However, Mr Lewis warned Britons to focus instead 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 will pay:
Electricity
- Standing charge – 53.37p per day
- Unit rate – 27.35p per kWh
Gas
- Standing charge – 29.62p per day
- Unit rate – 6.89p per kWh.
However, these figures will vary by region, so individuals should check for themselves what their unit rates and standing charge are.
An audience member asked Mr Lewis if it’s worth going for a fixed rate deal as more suppliers have started to offer these types of tariffs.
To answer the question, the financial expert pointed to predictions from Cornwall Insight about what will happen with the price cap over the next year, to show it will increase by one percent.
He said: “Based on the current predictions from Cornwall Insight, it’s worth fixing at a maximum one percent above the current rate.”
He went on to explain that most fixed rate deals are on offer for existing customers only so there’s little use searching for them on comparison websites, and that they change regularly.
Mr Lewis also had an email from an woman named Jackie, who said her direct debit had more than doubled, and she thought this was due to the standing charges increasing under the latest price cap.
In response, Mr Lewis reiterated his concerns that increasing the standing charge is a “moral hazard”, saying: “Lower users are actually being pnished because they can’t make big savings from cutting usage.”
He pointed to one supplier, Utilita, who do not have any standing charges, although they make up for this with a comparatively higher unit rate.
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