Martin Lewis issues 'fix now' energy warning as Ofgem price cap rises again

Martin Lewis has issued his response to Ofgem's price cap, which will be rising by £111 a year from April.

This morning, the energy regulator confirmed that its energy price cap was rising by 6.4%, going from £1,738 a year to £1,849 from April 1. This is a rise of £111 a year or £9.25 a month. The hike follows two previous rises in October, which saw bills go up by 10%, and in January, when they rose by 1.2%.

The Money Saving Expert (MSE) website founder responded to the news today in a post to X - formerly Twitter, sharing everything you needed to know about the move. This included standing charges, how to know if you are on the price cap, and whether you should fix your deal or not.

The MSE website founder, said that after the rise, for every £100 you spend on energy you will be paying £106.40 from April. He added: "Yet in reality, as the daily standing charge is dropping, some lower users (below £100/month) will see only small rises, but those who use a lot (above £200/month) will likely see 7%-10% increases.

"Those are averages, but there is a lot of regional variation in prices (we're already building a calc on MSE to be available later today so you can see the direct impact) with London & North West Wales outliers as their electricity standing charges are rising."

Martin said if you are not a fixed or "special deal," you will likely be on your energy provider's standard tariff - which means you will follow the price cap. Around 11 million Brits are believed to be covered by the price cap. Martin said: "If you don't know assume you, like two third of homes probably are."

He then described Ofgem's price cap as being "pants" and if you can, you should fix to a fixed deal if you are not already on one before the rise in April. He explained: The cheapest year-long standalone fixes right now are about 4% LESS than the current Cap, never mind once it rises in April, so if you get a good fix now you lock in at a cheaper rate for a year, get price certainty, save instantly and save relatively more once we get to April.

"The cheapest fix depends on where you live and how much you use, so do a comparison. Though I'd wait a couple of hours, as I hear more tariffs are being launched. Remember, though, that the savings comparison sites will show now are compared to the current cap; they will be bigger compared to April."

If your usage is very low - which Martin says is under £80 a month - you should look at tracker deals instead of fixes. Specifically, Martin highlighted special tracker deals from British Gas and EDF, which discount £50 off the annual standing charge. He said: " As with low usage, that's a bigger proportionate saving. And sophisticated users should look at (or likely already know about) Octopus or Tomato's time of use tariffs.

Ofgem blamed the price cap rise on a spike in wholesale prices, along with an increase in policy costs and inflationary pressures. It noted that wholesale prices are 9.4% higher than this time last year, although they remain 22% lower than at the height of the eneregy crisis in 2022.

Martin shared that currently, energy experts believe things will level out after the April rise for the next year. However, he says the further forward you look, the more "crystal ball gazing" it was, adding: "The chance of peace in Ukraine, the Middle East, or the US pumping out oil could see energy prices fall."

Martin Lewis will be discussing the price cap on the ITV Martin Lewis Money Show this evening at 8pm where he will be chatting to Ofgem chief executive, Jonathan Brearley.