Martin Lewis is telling people to switch to an EDF or EON tariff depending on whether they spend more or less than £170 a month on gas and electricity.
Due to quirks in Ofgem price cap tariffs, some of the best deals on the market right now are different depending on how much you spend on your energy bills.
That’s because energy giants EDF and EON are offering two different tariffs which promise to cut bills in two very different ways.
EON is offering an EON Next Pledge tracker which promises to slash money off unit rates – ie the amount you actually pay for each bit of electricity or gas.
EDF, on the other hand, is offering money off the much hated standing charges, which are daily charges added to your bill no matter what you use – but its deal isn’t worth it for higher energy users because it offers no discount off the unit rates themselves.
Martin Lewis explained on his latest podcast: “EDF Ensure will have over a year, £50 cheaper standing charges. A flat discount, £25 cheaper on electricity, £25 cheaper on gas.
“The unit rates will be the same as electricity, although actually it’s launched now at slightly cheaper July rates then in 10 days or so you’ll be on the same rates as everybody else.
“Who’s it good for? Well it looks a good deal for lower users. A rough back of the envelope, if you’re using less than £100 a month on energy then you might want to switch to it because the standing charge has a disproportionate effect on you so EDF Ensure wins.
“If you compare it to a few other types of tariff out there, then for medium to higher users, you’ll be better off elsewhere.
“EON Next discounts the unit rates, whereas the new EDF tracker discounts the standing charge.
“So clearly you can see the EDF tracker favours lower users, the EON tracker favours higher users cos they use more unit rates as that’s what they’re discounting.
“It looks like if you’re using less than £170 a month then the EDF tracker wins, if you’re using more than £170 a month EON with discounted unit rates wins.”
But Martin added that a fixed deal might beat either of them right now because the price cap is forecast to jump in October.
He added: “But generally for medium to higher users at the moment, I would probably be looking at fixing.
“While the energy price cap is due to drop by 7% in July, it’s actually due to rise 12% in October.
“You can fix right now at 7% less than the price cap over the next year, so fixes right now look to be the best bet for medium to higher users. EDF Ensure is best for lower users.”