Martin Lewis has told households to act 'today' ahead of energy price changes, as the price cap is rising again next month. Ofgem, the energy regulator, has confirmed the price cap is rising again from October 1, and the financial adviser has warned households to make one change to ensure they're not stung by the increase.
Those on a standard variable tariff will feel it directly unless they act before the change. The cap will not affect everyone in the same way, and people already on a fixed or special tariff are in a different position from those on standard variable tariffs.
What the October price rise means
The Money Saving Expert broke down what the change means via a video posted on TikTok. He explained: "The price rise on October 1st on the price cap is 3.6% on average. This is 3.6% on the back of the 12.6% rise we saw in July."
"This October price cap lasts until December, and that means you're getting a big rise going into winter. In fact, it's 17% more, rates are on average 17% higher than they were back in April," he added.
He continued to add that there is also a change to VAT. "I thought the government was doing something about this, I thought it had scrapped VAT on domestic electricity. It has, and that VAT will go as well on the first of October. It only lasts six months and it's only on electricity. Without that, we would have seen a 2% extra rise."
Gas costs set to rise sharply
Lewis went on to explain that gas is where households will see costs rise. "With electricity, the unit rate is going up just less than 1%, and the standing charge is actually going down by 4%. Gas is where the real problem is. The gas unit rate is going up by 8.7% and the standing charge up by 2.2%," he said.
The cap applies to those on standard variable tariffs. Martin said: "The price cap only applies to standard variable tariffs. If you're on a fix or a special tariff, the price cap does not affect you."
Why fixing now is the safest option
He urged households to act as soon as possible to ensure that they do not see this rise. He said: "If you fix, you lock in that unit rate and standing charge. From October, expect the cheapest fix now to be around 10% cheaper than the rate you'll be paying from October if you stayed on the price cap."
He urged Brits: "The safest thing to do if you're on the price cap is just to fix today."
