Martin Lewis warns customers NOT to switch energy deals in the hope of a cheaper offer amid the gas crisis – and says it’s safer to stick with their current provider’s price cap
- Martin Lewis has urged customers to ‘do nothing’ in the face of the energy crisis
- Money saving expert, based in London, made plea on his ITV show on Thursday
- Ofgem today warned there will be a ‘significant rise’ to the cap on energy bills
Martin Lewis has urged customers to ‘do nothing’ in the face of the ongoing energy crisis.
The money saving expert, based in London, said those who want cheaper energy deals shouldn’t shop around like normal – instead he insisted ‘inaction is now the best action’.
Speaking on his eponymous ITV show on Thursday, Martin said customers should pick deals that match their energy providers’ price cap – or wait until they are given one when their current deal ends.
It comes after Ofgem today warned there will be a ‘significant rise’ to the cap on energy bills – hitting millions of Britain’s poorest people – with soaring energy prices set to push average annual bills through the £2,000 barrier for the first time.
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Martin Lewis (pictured) has urged customers to ‘do nothing’ in the face of the ongoing energy crisis
The finance expert explained: ‘Do nothing, do nothing, energy prices are rising, energy firms are falling. The cheapest fixes are £500 a year higher than they were just a month ago.
‘Shocking. People are panicking. Do nothing. Inaction is now the best action,’ he added.
Explaining the reasons behind the surging prices, he said: ‘The wholesale gas price is the price firms pay, and in the UK a lot of our electricity is heated by gas so it hits the electricity price too, it was normally about 50p/therm, you’ll see it has exploded in the last few months – it’s now well over five times the normal amount and that’s hideous.
‘On October 1, the price cap jumped 12 per cent, or 13 per cent to the people on pre-pay. That cap was based on the wholesale rates between February and July, and we could see it was rising then – we thought it was big then, but that’s nothing compared to August to January, which is what the next April 1 cap depends on. As you’ll see, there has been an explosion in that time.’
The price cap of £1,277 is due to rise to £1,660 next April, Lewis warned.
The money saving expert (pictured), based in London, said those who want cheaper energy deals shouldn’t shop around like normal – instead he insisted ‘inaction is now the best action’
‘The latest estimate is that on April 1 the price cap will rise by 30 per cent based on the current run rate, to £1,660 a year on typical use,’ he said. ‘That means around a £500 increase compared to a year before.
‘A year ago you could lock in, on typical use, for around £800 a year. If you come off that deal now you go automatically to the price cap at £1,277, a 50% cost increase.
‘That’s horrible. But if you go to the cheapest fix on the market now it’s £1,700 a year – over double your cost.’
‘I would think of the price cap as a six-month fix – it’s the cheapest deal on the market,’ he suggested.
As the gas crisis escalated, industry analysts today suggested the current energy cap of £1,277 would rise by as much as £800.
Speaking on his eponymous ITV show on Thursday, Martin (pictured) said customers should pick deals that match their energy providers’ price cap – or wait until they are given one when their current deal ends
Ofgem chief executive Jonathan Brearley, didn’t put a figure on it, but said there will be a ‘significant rise’ in the price cap set by the industry regulator which helps to control the cost of gas and electricity in the UK. He didn’t knock back claims that fixed and other deals could reach £2,000 in 2022.
‘We can’t predict everything, and the wholesale market, as we’ve seen, has gone up and down extremely quickly so we can’t predict fully what that will be,’ he told BBC Radio 4’s Today programme. ‘But, looking at the costs that are in the system, we are expecting a significant rise in April.’
But Mr Brearley added that the current price cap will remain until April. ‘We have no plans to raise the price cap before April,’ he said.
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