Martin Lewis has dropped a special energy bills edition of his popular weekly BBC Podcast urging 85 per cent of households across the nation to get off the price cap to ensure “absolute peace of mind” for the next 12 months. Energy bills increased by 10 per cent on October 1 which means people on the price cap will pay around £149 more over the year ahead, with annual costs rising from £1,568 to £1,717.
The consumer champion has renamed Ofgem’s energy price cap the ‘pants cap’ telling listeners that everyone on it “should consider ditching price-capped tariffs right now and do a comparison” to find a better fixed deal for the next 12 months.
He explained that anyone not sure if they are on the price cap probably is as they would need to have switched to a dedicated tariff with their supplier or moved to a new energy provider.
Martin said: “We use the word price cap because it sets a maximum that firms can charge on their standard tariffs but in reality they all charge the maximum, so it is effectively what we had in regulated pricing for 85 per cent of homes in the UK.
“Now, I have today decided that we are renaming the price cap the ‘pants cap’ because it is not a good rate, in fact nobody listening who is capable of understanding should be on the price cap – GET OFF THE PRICE CAP is my message today.”
He added: “If you’re on the price cap you’re likely paying massively too much over the next year, it’s a ‘pants cap’, if you want peace of mind then fix.”
Martin said that “a fix is the right move for most people, that is the easy sensible decision” and went on to explain how not all fixed energy tariffs require a smart meter. While most do, some don’t so it may be worthwhile looking at other providers if your supplier insists on installing one.
The latest energy price cap predictions from Cornwall Insights and EDF suggest a slight dip of one per cent from January and further falls throughout 2025. However, Martin explained that even with further drops, by September next year, the price cap will still be higher than it is today, so a fix will save you money in the long run.
He also urged people to use comparison websites that show all tariffs by default to see which is the best deal for their household – sometimes this function might need to be toggled on in the filter settings.
Martin also reminded people that there is no cap on energy bills, so if you use more, then you’ll pay more and similarly, use less and you’ll pay less.
In the jam-packed podcast the financial guru shared the four best options to get a cheaper fix, but don’t worry that’s also covered in detail in this week’s MoneySavingExpert (MSE.com) newsletter here.
Four ways to beat the price cap
Martin lists the four options available to households, depending on their circumstances, to beat the price cap are:
- Fixed tariff – the easiest and safest route
- Get a discounted price cap tariff
- Octopus rapid price-change tariffs
- Consider dedicated Electric Vehicle (EV) tariffs
MSE.com lists the current cheapest fixes on offer are available from:
- Outfox the Market
- EDF
- British Gas
- Octopus
- E.on Next
- Ovo
Full details on these fixes and all the other ways to beat the price cap can be found on MSE.com here.
You can catch up with the Martin Lewis Podcast on BBC Sounds here.