Martin Lewis has issued an urgent warning urging households on standard energy tariffs to consider switching to a fixed deal before the Ofgem price cap rises by 13 per cent on July 1. The consumer champion, writing in the latest Money Saving Expert newsletter, advised that those whose bills are tied to the price cap should act now to secure protection against further price increases later this year.
Price Cap Increase Details
The upcoming change will raise the typical annual household bill from £1,641 to £1,862, reflecting higher wholesale energy costs. Lewis noted that many households have not yet felt the full impact because the price cap adjusts slowly to market fluctuations.
“If you're on your firm's standard variable (ie, Price-Capped) tariff, get off it before it jumps 13 per cent in a week's time,” he wrote.
Wholesale Costs and Future Caps
The current price cap increase is based on wholesale energy prices recorded between mid-February and mid-May, a period marked by volatility due to conflict in the Middle East. Although markets have since shifted, Lewis warned that future caps will also be affected. “Even if the conflict fully ended today, as we're well into the assessment period for October's Cap, those high rates are somewhat bedded in,” he said.
Money Saving Expert forecasts suggest the October price cap could rise a further 2 per cent before stabilising through winter.
Fixed Deals as a Cheaper Option
Lewis highlighted that fixed-rate deals are currently priced using today's wholesale costs, not the historic prices used for the cap. As a result, some fixes are cheaper than both the current cap and the July increase. He described fixing as “the risk-averse option” for those seeking peace of mind.
Money Saving Expert pointed to an exclusive British Gas fixed tariff available through its comparison service, which is around 15 per cent cheaper than the July price cap for typical consumption.
Advice for Different Households
Lewis stressed the advice is mainly for those on standard variable tariffs. For households already on fixed deals, the decision depends on remaining contract length and exit fees. He advised, “I'd personally (I've no crystal ball though) stick where I am unless you're very worried about the affordability of potentially higher future prices.”
Money Saving Expert also warned that some variable tariffs currently appearing cheaper will likely increase from July. Households struggling with bills are urged to contact their supplier, check for support schemes, and join the Priority Services Register if vulnerable.
