Switch to Fixed-Term Deals and Save Money Before It's Too Late

Martin Lewis's Urgent Advice to Beat Rising Energy Bills

Martin Lewis, the renowned money expert, has issued an urgent call to action for households to take advantage of a simple switch that can help them beat the upcoming rise in energy bills. He warns that the energy price cap is likely to increase even more than previously anticipated, making it crucial for bill payers to act quickly to secure savings.

Lewis highlights that a staggering 80% of UK households are currently overpaying for their energy. These households are stuck paying at the price cap when they could be benefiting from lower rates. In his weekly email, he states, "I'm afraid it's about to get worse." He predicts that the price cap, which is reviewed every three months, will rise by 5% to 7% in April.

Lewis urges customers of major energy suppliers like British Gas, EDF, E.on Next, Octopus, Ovo, and Scottish Power to explore cheaper deals beyond their standard offerings. He recommends switching to a fixed-term energy deal, which guarantees a set energy rate for a specific period. Deals from Ecotricity and Outfox the Market, for instance, offer rates 4.6% to 6.8% lower than the current price cap.

While fixed-term deals typically last for 12 to 24 months, they offer the advantage of locking in a lower price even if the energy price cap falls below their rate. However, most fixed-term deals come with an exit fee if you choose to switch before the end of the term.

"If you find a fix for up to 4% more than the current (Jan to Mar) Price Cap, it's predicted you'll save over the year compared with staying on the Price Cap."

Energy bills typically fluctuate every three months, aligning with Ofgem's adjustments to the energy price cap. This cap sets the maximum amount energy suppliers can charge per unit of energy, expressed as the annual bill for an average household. The cap has already risen twice in recent months, reaching £1,738 in January and £1,717 in October.

Forecasts for the April price cap increase vary, but most key analysts agree on an upward trend. Large energy firms like British Gas, E.On, and EDF predict an increase between 5% and 7%. A 6% increase would push the cap to £1,842, exceeding last year's level by £152 and marking the highest price since January 2024.

For more information on energy bills and cost-of-living assistance, visit The Independent's regularly updated guide.