Martin Lewis has urged energy customers to “get off” the price cap and switch to a cheaper fixed tariff to save money on bills over the coming year.
The Money Saving Expert founder took to ITV’s This Morning show today to answer questions from viewers about their finances. Just one week after Ofgem raised the energy price cap by 10 percent for winter, a few viewers understandably wrote to the money guru about their energy bill current tariffs.
Sharing a broader message, Mr Lewis said: “I would urge anybody out there at the moment who is sitting on the price cap to get yourself onto a whole of market comparison site, one that by default, shows you all the tariffs. Find what your cheapest fixes are, and look at how that compares to what you’re paying right now.”
Mr Lewis continued: “It’s worth noting, the price cap moves every three months. Most of you are on the price cap.
“It’s not expected to change much in January, and it’s expected to come down a tiny bit in April and July, but over the next year, you’re not going to pay – if current predictions are correct – much less than you are right now on the price cap, and you can fix at nine or 10 percent less.”
One viewer, Lauren, wrote into the show to explain she had switched from a standard variable tariff to a 15-month fix with Octopus Energy but was unsure if she’d made the right choice.
Mr Lewis answered: “Well, I’ve been out there saying that the price cap is the ‘pants cap’ and anyone who’s on the price cap is overpaying at the moment.
“Let’s be very plain because I think people have got confused and don’t know what the price cap is. The price cap is the default tariff that you’re on if you’ve done nothing.
“If you’ve not switched; if your fix has ended and you’ve not moved; if you’ve moved to a new house and you haven’t changed.”
The money expert also stressed: “If you’re on a fix, you’re not on the price cap. And the whole message I’ve been putting out is, it’s the price cap that’s going up by 10 percent. The price cap is the ‘pants cap’, and you need to get off the pants cap.”
He added that switching to a cheaper fixed tariff is the “simple and easiest” solution to reduce bills over the coming year.
Addressing the viewer’s Octopus fixed tariff, Mr Lewis said: “It’s not the very cheapest on the market, but if predictions are right, then you have fixed at about six percent less than it’s expected the price cap will average over the next 12 months.”
He added: “And, you get a piece of mind that it definitely won’t go up. So have you done the right thing? On the balance of probabilities, I think that certainly is the right thing to do.”
