State pensioners can get £149 off their energy bills from Tuesday – but need to act before midnight.
Customers of major energy firms including British Gas, EON, EDF and OVO as well as Octopus and Utilita will see their energy bills increase by £149 on Tuesday, October 1 as Ofgem increases the price cap, unless you’re already on a fix.
Money expert Martin Lewis has said that it’s an unusual time for the energy market, because Ofgem is putting the price cap up by 10 percent in October, from £1,568 to £1,717, a rise of £149.
But wholesale rates now are starting to come down, meaning energy firms are offering cheap fixes just as the price cap is going up.
But there are fixed energy deals now which will effectively wipe out the price cap if you act today before the new cap comes into effect.
Of course this doesn’t just apply to state pensioners, any UK household can wipe out the price cap rise by acting today.
But it will be especially important for state pensioners no longer collecting their £200 to £300 Winter Fuel Payment automatically this winter, as well as losing their £300 Cost of Living payment paid in the previous two winters.
Martin Lewis said: “There is a way to beat the rise but in order to do that you need to understand what’s happening.
“Now unless you already know you’re on a fix you’re almost certainly on a standard tariff.
“It’s well over 80 percent of homes so it’s almost certainly the majority of people watching will be on one of those tariffs.
“For every £100 you pay on energy right now, from next Tuesday you are going to pay £110 for the same usage. That is what a 10 percent rise means.”
Martin explained that because wholesale energy prices are going down, and the price cap is based on wholesale rates from six months ago, ‘bizarrely’, the price cap is going up just as fixed rate deals are coming down in price.
Martin added: “Outfox The Market is the cheapest fix right now. It is 9.4 percent cheaper than the October price cap on average and 0.8 percent cheaper than what you pay.
“So it drops a tiny bit now but from next Tuesday you save a lot.
“EDF has a tariff which says you can fix now at the current rate. So you simply just don’t get that price rise.
“That’s it you just stop the price rise.”
“I would say for the vast majority of people who are risk averse and don’t want to see prices going up, fixing now is the safe option.”
“But those questions say ‘my company has offered me should i fix? This is not about getting a fix, this is about getting a cheap fix. If you’re gonna lock in a price, you want to lock in the cheapest you can get.”