Consumer champion Martin Lewis has issued an urgent 'do not ignore this' warning to British households, urging them to move off the energy price cap before a critical July deadline. The Money Saving Expert founder highlighted that recent drops in wholesale energy costs, following a ceasefire between Iran and the US, have created a fleeting opportunity for consumers to lock in cheaper fixed tariffs.
Immediate Action Required
Lewis emphasised that acting swiftly is essential, as the current price cap reduction is temporary. "Act now and you can lock in a fixed rate below the new lower April price cap, which most of you are on, even if you don't know it," he stated. This advice comes ahead of an anticipated 14% increase in the price cap on July 1, which could significantly raise bills for those remaining on variable rates.
Volatility in Wholesale Markets
The finance guru pointed to ongoing Middle East conflicts as a primary driver of wholesale price fluctuations, causing energy costs to rise and fall unpredictably as peace talks advance and stall. Lewis noted, "This could be the last chance to lock in below the Price Cap, or equally fixes could get cheaper," underscoring the uncertainty in the market. He described securing a fixed rate now as the "safe option" for most households, offering certainty against future hikes.
Price Cap Changes and Predictions
On April 1, the Ofgem energy price cap dropped by 7%, reducing the average annual bill from £1,758 to £1,641—a saving of £117 or around £10 per month for typical dual-fuel households. However, this still leaves bills approximately £600 higher than pre-crisis levels from the winter of 2020-2021. Forecasts from Cornwall Insight suggest a potential 18% rise from July, adding £288 annually and pushing costs nearly £900 above pre-crisis norms.
How to Secure Savings
Lewis recommended conducting a full market comparison to find a fixed tariff that offers even a small saving over the current cap. "You're looking for one that saves you even a small amount over the current cap, as far bigger savings will come from July," he explained. The price consumers pay depends on factors like location and payment method, making personalised comparisons crucial. By locking in a rate now, households can protect themselves from the projected summer surge, ensuring budget stability amid economic uncertainty.
