Energy Bill Savings: Martin Lewis Highlights 'Pretty Good Time' to Switch to Fixed Deals
Consumer champion Martin Lewis has emphasized that while it's impossible to pinpoint the perfect moment to lock in a fixed energy deal, the current period presents a 'pretty good time' for households to make the switch. This advice comes as experts warn that staying on default tariffs could mean missing out on significant savings, with potential annual reductions exceeding £200 for many consumers.
Price Cap Reduction and Its Impact on Household Bills
Ofgem, the energy regulator, recently announced a 7% decrease in the price cap for Great Britain, effective from April. Typically, this adjustment primarily affects those on default tariffs, but this time, the reduction will apply universally due to the government's removal of green charges from bills. The new cap will lower the average dual-fuel bill by £117, bringing it down to £1,641 per year for typical usage.
Martin Lewis, founder of MoneySavingExpert, pointed out that the cheapest available fixed deal is currently 14% cheaper than the existing price cap, which stands at £1,758 annually for a typical dual-fuel customer. He urged consumers, stating, 'You're paying too much if you're on it. If you can get off it, get off it.'
Why Fixed Deals Offer Consistent Savings
Lewis predicted that fixed rates are likely to fall by 7% to 9% once the new price cap takes effect, maintaining a savings differential of around 14% for those who opt for fixed deals. Analysts anticipate that energy costs will hover near the new cap level for much of the year, meaning the savings from switching to a fixed tariff should remain relatively stable if these forecasts hold true.
Richard Neudegg, director of regulation at Uswitch.com, echoed this sentiment, advising households not to 'rest on their laurels.' He explained that every household will see bill adjustments in April, but those on cheap fixed tariffs will benefit the most, enjoying lower rates immediately and further reductions from April.
Top Fixed Deals and Consumer Options
At the time of reporting, Uswitch's best-buy table featured Fuse Energy offering a 13-month deal priced at £1,498 based on typical usage, which is £260 below the January price cap and £143 below the April figure. Outfox Energy provides a 12-month deal at £1,519, while EDF offers a price cap tracker that matches rates and includes £100 off standing charges for a year.
By choosing a fixed deal, households can reduce their heating bills during the colder months and still gain from the government's intervention in April, making it a strategic move for cost-conscious consumers.
