Martin Lewis shares crucial energy price cap update for every household across the UK
Martin Lewis has urged every household across the UK to “do nothing” during the ongoing energy crisis as global gas prices continue to rise, impacting suppliers and more than 15 million homes across the country.
The founder of MoneySavingExpert.com issued the stark warning twice at the start of the latest episode of Money Show Live on Thursday to emphasise the importance of how “inaction is now the best course of action.”
He said: “Do nothing. Do nothing. Energy prices are rising, energy firms are falling. The cheapest fixes are £500-a-year higher than just a month ago - shocking. People are panicking. Do nothing.”
The consumer champion changed the main focus for his weekly TV show this week to address the energy crisis in order to help every energy bill payer understand what the crisis means for them and why they shouldn’t switch suppliers just now.
Martin previously covered the energy price cap just two weeks ago at the start of the new series of Money Show Live, however, he said the situation has “changed radically” since then and felt it was important to do it again.
The financial guru explained how the energy price cap limits the standard variable rate - the default tariff that firms can charge - and how more than half the homes across the country are on it, with many more going to be in the future.
Martin told viewers: “You are on it, or you’ll be automatically put on it if you’ve never switched tariff, your cheap fix deal ends and you do nothing, or your firm goes bust and you’ll be ported across and you do nothing.”
He also explained how the energy price cap is actually a rate cap and it may be confusing to some people.
He said: “There is no maximum limit on the amount you pay, you often hear this £1,277-a-year figure, that’s the cap for someone with typical use - if you use more, you pay more.”
And in even more bleak news for bill payers, he warned that the latest estimates indicate the energy price cap will rise by 30 per cent on April 1, 2022, based on the current run-rate to £1,660 per year on typical use.
He explained: “That means around a £500-a-year cost increase compared to a year before. There would have to be an enormous radical change for there not to be a huge increase.”
But where the money-saving expert had previously given advice on suppliers customers could switch to fixed deals that were cheaper than the price cap, he said the problem now was that there were no alternative fixed deals on the market cheaper than the price cap.
"About a year ago, you could lock in on typical use for around £800 a year," he said, adding that coming off that deal right now would put you onto the price cap of £1,277.
"If you were to go with the cheapest fix on the market right now, it’s £1,700 a year - over double your cost.
"Two weeks ago I had alternative solutions. Now, I have no alternative solutions. The answer is there is nothing meaningfully cheaper than the price cap, there are no fixes close to the price of the price cap."
He repeated: “The answer for most people is do nothing and go on to the price cap.”
Answering a question from a viewer who asked what she should do when she comes to the end of her fixed rate at the end of November, he said: "Assuming nothing radically changes in the meantime, do nothing. You'll come to the end of your fixed rate, you'll go onto the price cap, there is nothing cheaper.
"I know it's strange to hear me saying this, the guy who's been telling you to switch in all different genres for years. Do nothing."
The Martin Lewis Money Show Live airs at 8.30pm on STV every Thursday.
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