MoneySavingExpert founder Martin Lewis has issued an update on whether households should now fix into an energy deal.
Energy bills have shot up at an unprecedented rate over the last month, after the regulator Ofgem hiked its price cap by £700 on April 1.
For those on a default tariff who pay by direct debit, the price cap has gone up from £1,277 to £1,971 - a rise of £693.
Prepayment customers have seen a bigger jump, with their price cap going up by £708, from £1,309 to £2,017.
The price cap limits how much households can be charged for each unit of gas and electricity they use.
But with prices likely to rise again later this year, many households are wondering whether they should fix into a deal now.
In a new video posted on his Twitter page, Martin explained how analysts at Cornwall Insight are anticipating another 32% rise in the price cap when it is reassessed in October this year.
This would put the October price cap for someone with typical energy use, and on a default tariff, to around £2,600.
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We are currently half-way through the assessment period for the October price cap, which is based primarily on wholesale rates that energy firms pay between the start of February and the end of July.
"That means we do have a little more certainty because things are solidifying from where they were before and what’s likely to happen in October,” said Martin.
“As we are half-way through the period… there is very little chance that we are going to see prices drop in October.
“We would need to see a monumental, unprecedented drop in wholesale gas and electricity prices for that to happen."
From April 2023, Martin said the prices are “much less certain as we are not yet in the assessment period”.
Cornwall Insights predict the price cap will drop in April by about 12% from the October price cap, taking someone on typical use to £2,300 - so still above the current April price cap.
Martin then explained that if you consider all of these predictions, you would expect rates on average to be around 17% higher than they are now.
Based on this, the MSE founder said if you can find a fix that is no more than 17% higher than the rates you're currently paying "then that's worth doing".
However, those who are anxious about their energy bills and who want price certainty might want to consider fixing at a slightly higher rate.
"I think a fix does have the merit of price certainty… therefore if you value price certainty I think that is worth factoring in as a premium," said Martin.
"I would suggest as a rough rule of thumb, even though the maths says 17%, if you could find a fix at no more than 25% higher than the current price cap rate, and you value price certainty, it is probably worth fixing at that rate.
"It's worth remembering if rates were to drop dramatically in the future and you would be able to fix at a much cheaper rate in the future, then you do pay an early exit penalty..
"But that is relatively trivial compared to how much people are paying for gas and electricity today."
Of course, no one can be certain about how energy prices will change over the next few months.
Martin also said his analysis is based on the price cap rate lasting six months - with it being updated every April and October.
There are consultations happening currently to discuss whether it would be reassessed more frequently.
“This is my best guess. I do not have a crystal ball and there are many uncertainties out there,” he said.
“I’m doing my best on the information I have but I can’t make promises.”
