Martin Lewis reveals the fixed rate tariffs that could save you money on your energy bill

·3-min read
Money Saving Expert's Martin Lewis during a joint press conference with Facebook at the Facebook headquarters in London. (Photo by Kirsty O'Connor/PA Images via Getty Images)
Financial broadcaster Martin Lewis has said customers should consider some fixed rate energy deals. (PA Images via Getty Images)

Martin Lewis has revealed the fixed energy tariffs that Britons should consider if they want to save money this winter.

Soaring gas and electricity prices have left the UK gripped in a cost of living crisis, and the warnings are that things are about to get even worse.

Inflation, the rate at which prices rise, increased to 9.1% in the 12 months to May, the Office for National Statistics (ONS) said on Wednesday, its highest level for 40 years.

And the energy price cap, which has already risen by 54% in April, is predicted to go up again this autumn by 42%, according to energy regulator Ofgem, to about £2,800.

Read more: UK retail sales fall as price rises force people to cut food shopping

The cap limits what energy companies in England, Scotland and Wales can charge for their default standard rate tariffs.

Financial broadcaster Lewis, founder of MoneySavingExpert.com, says there are fixed rate tariffs on offer at the moment that, while not cheaper than the current energy cap, are lower than the expected cap in October.

Watch: Inflation rises again to new 40-year high

Many customers on the standard rate have been poised to pounce on a fixed rate deal that could save them money.

Lewis advised: "If you're offered a year's fix at no more than 40% above your current price-capped tariff, or 45% more if you very strongly value budgeting certainty, it's worth considering."

He based his advice on analysis from market research firm Cornwall Insight, which predicts the cap will increase by 51% for October to December to £2,980 a year, more than the figure forecast by Ofgem last month.

"So let's get to the nub of this," Lewis wrote in a blog post on Thursday.

"This is about whether there's a deal likely to be cheaper than the price cap if we look over the next year. For that, clearly there need to be fixes you can lock into that are cheaper than the expected October price cap. And there are."

He said most of the providers' fixed tariffs worth considering are available to existing customers only.

File photo dated 15/10/16 of a gas burner on a hob cooking appliance. Firmus Energy has announced a further gas price hike for Belfast customers. Issue date: Tuesday June 7, 2022.
The energy cap is expected to rise once again in October. (PA)

They include two British Gas tariffs that are 37% more than the current price cap, two EDF Energy tariffs that are 42% higher and a E.on/E.on Next fixed rate that is 42% more than the cap but has no exit fees.

However, Lewis warned that his calculations are "not an exact science" and that this is his "best-guess with the information I have at the moment".

Read more: Energy scams jump 10% as fraudsters exploit cost of living crisis

He also said: "If you want price certainty, the cheapest fixes now give you that, but you'll pay more in the short term. If in doubt though, there's nowt wrong with playing safe and sticking on the price cap.

"And it should be noted if wholesale rates drop, cheaper fixes could be available in future, so by locking in now you miss out."

Lewis also warned of a trend of high early-exit penalty fees, with some up to 10 times higher than last year.

MoneySavingExpert said some energy companies are charging up to £600 for early exit on a fixed deal for a duel-fuel home.

It said energy firm Outfox the Market now charges £600 to exit a one-year fixed deal, compared to £67 and £0 a year ago.

Two-year fixed deals with EDF Energy have gone up from £70 to £300, while British Gas charges £200 to exist a one-year fixed deal, MoneySavingExpert said.

Watch: Energy bills may increase almost three-fold, warns Martin Lewis

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