Martin Lewis has come to the rescue of a thankful viewer, helping them save an impressive £454 with a simple five-minute trick that’s within reach for most. On The Money Show, the financial guru delved into the potential savings made by switching to a fixed energy tariff, using a member of the audience to showcase the process.
The episode was particularly timely, coinciding with the announcement that the energy price cap would increase by 6.4% come April 1. One concerned audience member confessed that the hike would affect him and his partner, and sought advice on how best to mitigate the impact.
Lewis offered a clear-cut strategy, reports the Express. He said: “You want to get off of the price cap because the fixed rates are so much cheaper than the energy price cap.”
Detailing the benefits of making the switch, he emphasised: “The first thing is if you fix, you get peace of mind and you get certainty. You can get up to 5% off at the moment compared to the current price cap and it is worth noting that there are a couple of comparison sites that have exclusive deals at the moment.”
He reassured viewers about their qualms regarding smart meters as well, saying: “Most of the best fixes at the moment do not require you to have a smart meter so do not let that put you off.” But, perhaps the most critical takeaway from Lewis’s advice was his explanation of the price cap dynamics.
He said: “The biggest message tonight though is you’re probably going to do a comparison and it is probably going to tell you that you won’t save much. That is because the saving is compared to the current price cap, that price cap is going up 6.4% in April. So if it says £20 or £30 in reality you are probably talking £100.”
An audience member showcased that savings can indeed be significant when it comes to energy bills, revealing they managed to slash a staggering £454 yearly off their bill after opting for a fixed rate. The current energy price cap, established in 2019, sets a maximum limit on the rates energy providers can impose per unit of consumption.
Energy regulator Ofgem routinely reviews this cap every three months and has now announced its third consecutive increase, set to come into effect on April 1. The uptick, amounting to an extra £111, has been attributed to the war in Ukraine by Ofgem, impacting energy supplies and pipeline operations.
A government statement says: “In practice, this rise will mean an increase of around £9 per month for a typical household over the next 3 months.”
This adjustment will result in a typical household’s annual energy spend rising to £1,849. Looking back over the last three years, since before Russia invaded Ukraine, households are now expected to fork out roughly £600 more annually for gas and electricity.
With international gas prices soaring, so too have British energy bills, as clarified on a government website. The explanation details: “That’s because the price we pay for energy in the UK is set by gas prices on the global market, over which we have no control.
“As a result of recent events that have affected the market, which the whole of Europe is dealing with, wholesale gas prices covered by the period of this price cap are around 15% higher than they were in the period covered under the previous price cap. This is comparable to the rise in prices across Europe.”