Martin Lewis Shares Urgent Energy Advice
The UK’s Money Saving Expert, Martin Lewis, has announced his predictions of an ‘energy bill disaster’ by October this year, with energy bills likely to hit around £3,300 on average this winter.
In a recent email by Money Saving Expert, Lewis said that “The coming winter will be bleak, the cost of living crisis is set to climax in catastrophe, unless there is further intervention. Though the clock is ticking, by the time the new PM is in place, we’ll know the new price cap, so rising direct debits will be panicking millions. For now, let me explain what’s coming, and try to mitigate it where I can.”
The Ofgem price cap is currently set at £1,971 for 22 million households across the UK. This price cap refers to a limit on how high variable-rate energy bills can reach for average households paying by direct debit.
Lewis explained to his email subscribers that if you pay around £50 a month now, you will be set to pay around £85 per month from October onwards because the Ofgem price cap is going up. Predictions set anticipate that it could rise to £3,244 from October, up £200 more from the original estimated figure announced two weeks ago.
Furthermore, for households paying a higher rate of £150 a month, predictions anticipate them to pay £250 per month from October onwards too.
The Money Saving Expert added that this “price cap is mostly predictable as it is dictated by regulator Ofgem’s published algorithm, based mainly on year-ahead wholesale prices. These have spiked in recent weeks, so analysts Cornwall Insight’s latest predictions are frightening.”
At present, over 80% of UK households are on variable-rate deals for their energy bills, This is because the price of these deals are limited by the current Ofgem price cap. It is also because there are actually only a limited number of fixed rate options available on the market – some of which are likely to be very expensive too.
Lewis shared the following tips to save some money ahead of this significant increase in October:
Save cash if you can
It is definitely worth trying to set aside any cash that you are able to prior to energy bills rising in October. This is because it should help to ease the cash-flow pain that many UK households should anticipate to experience this winter.
Try to cut down on your energy usage
The majority of UK households have variable-rate energy deals, meaning that they pay for the energy that they use. As such, the more units consumed, the more is paid.
Thus, it certainly makes sense to cut down on energy usage where possible. Ways to do so could include fitting a water-saving shower head and energy saving light bulbs. The shower head can help to knock off 2% of energy consumption each year, and replacing light bulbs with LED ones can mean that you end up using half the power.
Consider other energy saving changes around the house, if you have the budget, such as upgrading your boiler and solar panels.
Furthermore, lifestyle changes such as spending one less minute in the shower each time could save a household of 4 up to £75 annually in energy bills, and £105 in water bills alone.
Additionally, using air drying techniques especially on windy, dry days, instead of using a tumble dryer to dry your clothes could help to save £60 a year in energy bills too.