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Daily Mirror
Daily Mirror
Business
Sam Barker

Martin Lewis says 'unaffordable' energy bill hikes are coming - and what to do

Consumer expert Martin Lewis says "unaffordable" energy bill price hikes are coming - but that consumers can take action to help.

Speaking live on the ITV Money Show on Thursday, Lewis said these bills could rise by 50 percent in April.

The rise is coming because a price cap that limits how much energy providers can charge for variable rate deals will be reviewed - and will almost certainly rise .

Lewis said: "In April the energy price cap will rise 50 percent, adding an unaffordable £600 to the total bill."

The best thing for most consumers to do if their energy deal is coming up for renewal is do nothing and fall onto an offer limited by the price cap, Lewis said.

In the past, the cheapest energy deals were normally fixed rate deals, not variable rate ones - which many consumers ended up on by default when their contract expired.

But now energy prices have risen so much that almost everyone is better off ending up on their energy provider's variable rate deal, limited by the cap, rather than take out new fixed rates.

Have you been charged huge amounts for fixed rate energy deals? Message mirror.money.saving@mirror.co.uk

The best thing for almost all households is to fall onto energy deals limited by a price cap, Lewis said (ITV)

Around 65 percent of UK homes are on variable rate energy tariffs.

Lewis said: "The vast majority of people should still be doing nothing and sticking to the price cap.

"Currently the energy price cap forces energy suppliers to sell gas and electricity below the cost price. There are no meaningfully cheaper deals."

The only good reason to take out a fixed rate deal is if the cost of it is 40 percent of the current £1,277 price cap, Lewis said.

He added: "If your company offers a fix you have to calculate how much above the price cap it is."

The cheapest fixed rate deal is currently 50 percent more than the price cap.

But some energy firms might offer existing customers cheap deals on fixed rates, so don't rule the idea out entirely, Lewis said.

Lewis added that the cost of gas to energy firms is still four times its usual rate, which is driving the price rises.

It rose as high as nine times the norm in 2021.

How the energy price cap works

The price cap is set by the energy regulator, Ofgem.

This cap limits the amount firms can charge the average customer on their default gas and electricity tariffs - usually variable-rate deals.

This cap is currently £1,277 a year for those on default tariffs and £1,309 for those on pre-payment deals.

It is technically a cap on how much energy firms can ask you to pay for rates.

The price cap is being reviewed in April for England, Scotland and Wales - Northern Ireland has a different system.

When that happens it is likely to rise - meaning households will pay even more for energy.

Energy UK chief executive Emma Pinchbeck has warned that "domestic energy prices are going to go up 45% to 50% in the spring".

According to another expert, energy sector specialist Cornwall Insights, bills could rise by 46% as the price cap could rise to £1,865 a year.

Lewis also said that data roaming charges are coming back - and urged Brits not to get caught out.

Mobile firms were previously banned from charging extra fees to use your UK allowance - calls, texts and data - while holidaying in the European Union (EU).

However, this no longer applies now the Brexit transition period is over.

Vodafone customers already face daily charges to make calls or use data while on holiday in EU countries - with EE and Three to follow suit later in the year.

Each network is reintroducing roaming charges, which will cost £2 per day when abroad in certain destinations.

Vodafone has confirmed its roaming charges will apply from January 6, while EE will start the charge from March 3 after previously saying it will kick in from January.

The fees for EE customers will affect those who joined the network or upgraded after July 7, 2021.

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