Martin Lewis gives view on whether energy customers should sit tight on deals

Households’ budgets are set to be squeezed further by surging energy costs this year.

Fixing energy tariffs may be worth considering for a few people, consumer champion Martin Lewis has said, although he suggested most should still do nothing (Peter Byrne/PA)
Fixing energy tariffs may be worth considering for a few people, consumer champion Martin Lewis has said, although he suggested most should still do nothing (Peter Byrne/PA)

Fixing energy tariffs may be worth considering for a few people, consumer champion Martin Lewis has said, although he suggested most should still do nothing.

The energy price cap, which acts as a backstop to limit the amount that households have to pay for default tariffs, sits at £1,277.

There have been predictions that it could jump by around 50% in April amid a major spike in global gas prices, which have been pushed up by high demand around the world.

Writing on MoneySavingExpert.com Mr Lewis, the website’s founder, said moving firm takes 17 days on average.

He said that if someone is offered a fix that is no more than 40% costlier than their current price-capped tariff, it is worth considering, particularly if they want certainty over budgeting.

But he said the market’s current cheapest fix is an average 56% more than the cap.

A few existing customer deals may get closer, although as in-house switches tend to happen more quickly, people could lose more “cheap rate” time, he added.

Depending on wholesale prices, fixed deals could become cheaper in future, or even more expensive, he said, adding: “This isn’t easy.”

Mr Lewis wrote: “So to summarise, it looks like most people should do nothing (no certainty, I don’t have a crystal ball), it looks like only a few edge cases should be looking at fixing right now.

“So if in doubt, just stick on today’s cheapest price – which is the cap. And to be plain, the 40% figure is my best guess, not firm.”

Mr Lewis emphasised that he was working on various assumptions, including that neither the Government nor regulator Ofgem make certain changes.

He recently told the PA news agency: “This year is going to be a very tough year for many people.”

People can use MoneySavingExpert.com’s Cheap Energy Club to compare deals.

Earlier this week, Boris Johnson poured cold water on calls for VAT to be removed from domestic fuel bills, describing it as a “blunt instrument”.

But the Prime Minister said ministers had not ruled out further assistance for households facing big increases in energy charges when the price cap is reviewed in April.

For those struggling with energy bills, Ofgem suggests contacting the supplier to agree a repayment plan.

People can also check whether they are entitled to help such as the Winter Fuel Payment or the Warm Home Discount Scheme.

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