Martin Lewis explains if now is a 'strong time to fix' on energy tariffs as cheapest deal could save you £329
Martin Lewis has explained whether he think its worth Britons waiting until July to fix on their energy
GETTY/PA IMAGES
Martin Lewis has explained whether he think its worth Britons waiting until July to fix on their energy.
Over the past two years, fixed energy tariffs have not been competitive, however with the Ofgem energy price cap set to rise this autumn, many people may be wondering if now is the best time to fix.
The energy price cap fell 12.3 per cent on April 1 to £1,690 a year and will tumble again from July 1, but there are concerns about whether there will be a rise in energy costs later down the line. Between July 1 to September 30, 2024 the energy price cap is set at £1,568 per year for a typical household who use electricity and gas and pay by Direct Debit.
Cornwall Insight has said it expects to see prices rise 12 per cent from October, causing many to consider an energy fixed deal.
In the MoneySavingExpert's Money Tips Email, Martin Lewis and his team complied a list of the cheapest standalone fixes and Britons can get a deal which is nine per cent lower than the current Price Cap.
For those who value price certainty, now could be a "strong time to fix". Ecotricity has a nine per cent reduction on the price cap - meaning households could save around £329.
Cornwall Insight has said it expects to see prices rise 12 per cent from October,
PAWhen asked if it's worth waiting until July to fall as the price cap would have dropped, the money saving expert explained this question is often "based on a confusion".
The Energy Price Cap will change in July, but that only impacts a firm's standard variable tariff; it doesn't impact fixes as they're not capped.
He said: "The rate you can fix at depends on how cheaply retail energy firms can buy energy at the time they offer the fix. We have no clue what that will be in July. It may be cheaper than now, it may be more expensive - it's about world markets. The Price Cap dropping has virtually no impact; it's based on PAST wholesale prices - so it's completely delinked.
"Of course, when the Price Cap moves, it changes the differential between its price and the cost of a fix (and firms may factor it in at the margins to their pricing decisions, as to how cheap they have to be to win market share).
"Yet remember you're fixing for a year (or more) and each Price Cap period only lasts three months. So the instant price is only a quarter of the decision anyway.
"That's why we try and base our assessment of whether you'll save on Cornwall Insight's predictions for the year ahead. So if you want to fix, as the differential looks decent now, it's a decent bet at the moment."
Even on the Price Cap, the cost people pay will vary by region and payment method.
As there are no changes to standing charges, and the drop in prices is all on unit rates, higher users will save relatively more than lower users.
From July, the price cap will fall seven per cent so £100 now will cost £93 then.
From October, the price cap is predicted to rise by 12 per cent so £100 now would cost £104 then.
From January 2025, the MSE team predicts the price cap will stay flat so £100 now would cost £104 then.
The predicted average over the whole next 12 months is two per cent more than now which mean it could be the perfect time to fix for some.
It means that some people would pay £1,427 for average usage for a year if they fixed now, id prices drop to to £1,756 in October on current predictions, people could make a saving of £329 against the price cap.
The cheapest standalone energy fixes, according to MSE:
The cheapest is Ecotricity Green one year fix. This has a limited supply as there are only 2,000 switches available. It is for:
- New & existing customers
- Dual fuel / electricity-only / gas-only
- Monthly Direct Debit only
- Need to have/apply for a smart meter
This deal is nine per cent less on average than price cap.
Next is Octopus 12month fix May 24 v3 for new & existing customers with dual fuel or electricity-only
This deal doesn't require a smart meter and is seven per cent less on average than the price cap.
Ovo Energy 1 Year Fixed is for:
- New & existing customers
- Dual fuel or electricity-only
- Monthly Direct Debit only
- Need to have/apply for a smart meter
This is five per cent less on average.
EDF Essentials 1yr Jun25 fix is for:
- New & existing customers
- Dual fuel or electricity-only
- Monthly Direct Debit / cash / cheque or
On prepay if someone has a smart meter, it is three per cent less on average than the price cap.
Not a fix:
E.on Next Pledge 1yr tracker is for:
- New & existing customers
- Dual fuel or electricity-only
- Monthly Direct Debit only
- Need to have/apply for smart meter
This deal tracks three per cent under the Price Cap, so if the cap gets cheaper, it does too.
It's a discounted Price Cap tariff and can be a good option if one is unsure what to do.