Martin Lewis explains how to stop your energy bill rising next week – and what will happen to prices in 2025
MARTIN Lewis has revealed how you can stop your energy bills from rising next week and whether they will go up or down in 2025.
The consumer champion featured as a co-host on ITV‘s Good Morning Britain yesterday morning.
And the MoneySavingExpert.com website founder used his platform to reveal how households can save money on their energy bills from October 1 when the new price cap comes into effect.
The new price cap, which affects about 28million households, will see the average family’s bill rise to £1,717 from £1,568 a year – a £149 hike.
It’s worth bearing in mind this is based on the average household on a dual-fuel standard variable rate (SVR) and you might pay more or less than £1,717 a year from next week based on your usage.
In any case, Martin said, you can beat the hike by locking in a fixed-rate energy deal which is lower than the October price cap.
A fixed rate deal freezes the amount you pay for a unit of gas and electricity for a set period which is usually 12 months.
A SVR sees the unit rate for gas and electricity go up in line with Ofgem’s price cap, which changes every three months.
One major perk to a fixed energy deal is that you know what you will pay per unit of energy over an extended period which gives you more certainty.
But, it can see you end up paying more overall than being on a SVR if wholesale energy costs falls and the price cap comes down.
Fixed-rate deals also come with exit fees if you want to come out of the deal earlier than the agreed period.
However, responding to a viewer question on whether they should lock in a fixed tariff with Octopus Energy for 15 months on GMB yesterday, Martin replied that it could save them money currently.
He explained this is because wholesale energy costs, which is what energy firms are charged, are falling so there are fixed deals on the market cheaper than the price cap.
This is because the price cap for October 1 was decided in August when wholesale costs were higher.
“Energy is going up (in price), it’s not going down,” he said.
“It’s going up on the first of October. It’s likely to come down a tiny bit in January but still be a lot more than it is now.
He added: “Bizarrely, energy prices are going up if you’re on the price cap, but the cheapest rates available if you are going to switch (and fix) are coming down.”
The consumer champion said based on current predictions for what the price cap will be in January and April next year, fixing now at a lower rate could save you money into 2025 as well.
The consumer champion said while energy bills are expected to rise by around 10% from next week, they will fall by 2% in January then a further 1% in April, based on predictions from EDF.
But some of the cheapest deals on the market right now are up to 9.4% cheaper than the October price cap.
So, lock in now, and you could save money on your bills between October and next June.
However, it’s worth bearing in mind, what EDF is saying the price cap will be next January and April are just predictions and aren’t guaranteed.
But Martin said if you are “risk averse”, locking in a fixed-rate deal now could be worth your while.
How to get help with energy bills
Locking in a fixed-rate energy deal ahead of prices rising next week is one way to cut the cost of energy.
There is a host of help on offer to cover costs over the colder months, including the Winter Fuel Payment and Warm Home Discount.
Both schemes are means-tested though, which means you will have to be on certain benefits to qualify.
But, in total, they are worth up to £450 which could massively help.
If you are struggling to cover the cost of your energy bills or have fallen into arrears, you might be able to get a free grant.
British Gas, ScottishPower, EDF and Utilita all have schemes offering customers up to £2,000.
You also might be eligible for help with energy bills via the Household Support Fund (HSF) which is worth £421million.
The new round will run from October until March next year, but many councils are yet to announce what type of help will be on offer.
However, in previous rounds, local authorities have given households in need energy vouchers, supermarket vouchers and free cash.
Contact your local council, which you can find using the Government’s online council locator tool, to find out what help is on offer.
It’s worth checking if your energy firm has any targeted support on offer based on your circumstances too.
For example, Octopus Energy is handing out 20,000 electric blankets to customers in need this winter.
When does the price cap change?
OFGEM reviews the cap on unit rates for those on the default tariff every three months.
This means the energy price cap can move up or down at four different points in the year.
Price cap rates are updated on the following dates:
- January 1
- April 1
- July 1
- October 1
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