Martin Lewis has issued a stark warning that thousands of UK households will see their energy bills skyrocket following a significant policy change. The MoneySavingExpert founder said that homeowners on expensive fixed energy deals have lost the Government-backed 'Energy Price Guarantee' subsidy, effective from the beginning of July.
This change affects at least 274 different fixed tariffs, leaving many bill payers vulnerable to huge spikes in costs. Lewis advised those affected to check their rates immediately: “If so, and it's materially higher than the cap rates you should consider ditching the fix and moving to your provider's price cap.” He cautioned, however, to factor in any early exit penalties.
The loss of the subsidy means bills could rise well above the Ofgem price cap of £2,074 per year. The standard variable tariff, which already had higher rates, is no longer shielded by the cap, leaving consumers exposed. The July price cap adjustment, effective until September 30, marks a crucial juncture.
Energy costs have been driven up by the Russian invasion of Ukraine, with wholesale gas prices soaring. Ofgem's price cap rose from £1,162 in August 2021 to a peak of £4,279 in January 2023. The Government introduced the Energy Price Guarantee in October 2022, capping annual costs at £2,500, and provided a £400 subsidy to households. With that support now withdrawn for fixed tariff customers, experts urge households to monitor usage and ensure accurate direct debit payments.
