Martin Lewis advice on energy bills as customers facing winter of rises – Birmingham Live

Energy prices are at an all-time high and people are bound to struggle in the coming months as the weather gets cooler.

The price of gas has seen companies collapse due to the price of wholesale gas causing the Government to initiate in emergency talks with companies to try and control the problem.

Meanwhile, energy experts and MoneySavingExpert Martin Lewis have been working hard to help reassure customers about the rocky road that is approaching.

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Now Martin has put out a number of warnings and advice to customers who are worried about seeing their bills rise and the best steps forward for the future.

There’s also more bad news on the horizon, reports the Mirror, but here are five things energy customers need to know.

1. 15 million people will see bills rise on October 1

The energy price cap may be in place to protect you, but it’s rising on October 1, and the average household will see their bills rise 12% to £1,277 a year based on typical usage.

“If you’ve never switched, or have come off a fixed or special tariff, you’re likely on your energy provider’s default standard tariff,” warns Martin.

2. Another price rise is brewing

The price cap is rising because of a jump in wholesale costs earlier this year – but record rates right now mean it’s likely to jump even further next year.

This will be announced in around February by Ofgem and will come into force on April 1, 2022.

“The price cap could jump again to a stomach-churning £1,450 a year based on typical use,” says Martin.

“As it’s sensible to look at energy bills over a year, the fact we’re nearly a third through the next assessment period (Aug – Jan), which determines the cap from Apr 2022, is crucial.”

3. Anyone coming off a fixed deal will pay more

The fact that prices are up 60% in a year means anyone coming off a fixed tariff is likely to find themselves paying more than they were – new fixed deal or not.

“The idea of ‘saving’ compared to what you were paying has gone for now.”

He says you have two options instead.

A. Wait it out. The cheapest deals right now are actually more expensive than the cap so you could just stick it out. This means if wholesale prices fall in the next few months, your bills will too. By the time the next cap kicks in Martin says cheaper fixes should be back and you can lock them in.

B. Martin says alternatively, you can act fast and lock in the cheapest fixed deal you can find right now. This would protect you if wholesale prices rise further.

“The last fix cheaper than the new price cap was pulled at lunchtime last Tuesday. So you will have to pay more than the cap to fix,” he explains. “Yet if the April cap rises sharply and wholesale prices continue to stay high, this could be welcome peace of mind, and a saving with hindsight.”

4. Should I extend my fixed tariff?

The expert advice on this one is no.

“Prices have risen so much that the savings you’ll make by sticking with your old cheap tariff, while it lasts, will be huge,” says Martin.

“So even if prices still rise, I suspect the gain of holding on to very cheap tariffs now will likely outweigh that. It is more art than science though.”

5. Should I avoid small providers?

Half a million homes were left in limbo when People’s Energy & Utility Point collapsed last week – and more suppliers will almost certainly follow.

The government has said it won’t bail them out, saying that it is normal to see some firms fall by the wayside,” says Martin.

“Yet some business experts predict if nowt changes about 30 more may go, leaving only 10 – far from normal.

“Yet predicting which’ll go and when is tough, because as soon as a firm knows it’s insolvent it must declare it, so there’s little pre-warning.

“If your supplier does go bust, the Ofgem safety net means you won’t lose supply, you’ll be moved to a new firm, and your credit is protected. The risk is one of delay, hassle and losing any cheap tariff you’re on, instead of being moved to the price cap.”

Also, be aware that if you are forced onto another supplier, you could lose your £140 Warm Homes Discount.

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