From April, the energy regulator Ofgem confirmed the price of the average household energy bill will fall by £238.
The £238 fall over the year equates to around £20 saved each month for the average household in England, Scotland and Wales.
Average annual energy bills are predicted to fall by 12% on 1 April for those on standard price-capped tariffs (most households). However, Money Saving Expert Martin Lewis has said energy bills are "still too expensive".
In June 2012, when I sold MSE (i'm still in charge though) I pledged £10m to go to charity. As that was a public pledge and I feel a duty of transparency, here's my latest blog on where I'm up to, and who's got what money... https://t.co/ewfnydAlJg
— Martin Lewis (@MartinSLewis) February 26, 2024
But should you stay on the Price Cap, or move to a fixed deal? Here we take a look at what Martin Lewis and Money Saving Expert have to say.
How to check if it's worth fixing your energy
The Price Cap will dictate what you pay over the next 12 months if you stick to a price-capped tariff.
If you're not on a fix, you're almost certainly on a price-capped tariff, so that's what you need to compare against.
Almost every household is currently on a standard tariff with prices dictated by the Energy Price Cap. For a household with typical usage, paying by Direct Debit, it's currently set at £1,928 a year and will fall to £1,690 a year from 1 April.
But remember, the Cap is not a cap on how much you pay – it only limits standing charges and gas and electricity unit rates.
Yet that's not the full story as the Price Cap changes every three months, so you need to know how it's likely to change over the next year.
Recommended reading:
Martin Lewis on energy bills as Ofgem price cap falls
Martin Lewis issues energy bills update before winter
Martin Lewis energy bills: Why it could cost more than the Ofgem price cap
The Price Cap is set to fall by 12% on 1 April
The most important thing to understand is that price-capped tariffs are variable, and the prices change every three months in line with the Cap.
So when considering if it's worth switching to a fixed deal, you need to look at what is expected to happen over the course of the next year. A fix that looks decent now could end up costing you more over the next year if energy prices drop.
These are a couple of possible predictions to go off:
- 1 Jul 2024 to 30 Sep 2024 - Weak prediction (2) - DOWN 13% - £1,463 a year
- 1 Oct 2024 to 31 Dec 2024 - Crystal-ball gazing (2) - UP 4% - £1,521 a year
Martin's rule of thumb for when it's worth switching:
Some of this is crystal-ball gazing and averaging, but if the predictions above are right, Martin's best guess is:
"Based on current published predictions, it would be worth fixing for 18% less than the current (January to March 2024) Price Cap.
"NB: This is compared to the current Price Cap, yet E.on's Pledge tariff is open to almost all and track".
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