Customers of major energy firms including British Gas, EDF, E.On, Octopus Energy and OVO are being told to switch before a £149 increase to their bills takes effect.
Ofgem has increased the price cap for households by an average of 10 percent from October 1, meaning that the average UK household will pay £1,717 per year, up £149 from £1,568 in the previous three-month period.
Included in the announcement is the unwelcome news that the energy regulator is also increasing standing charges, meaning users will pay 61p a day for electricity even if nothing is switched on at home at all.
Ofgem said: “Between 1 October to 31 December 2024 the energy price cap is set at £1,717 per year for a typical household who use electricity and gas and pay by Direct Debit. This is an increase of 10% compared to the cap set between 1 July to 30 September 2024 (£1,568).”
Now, money expert Martin Lewis is urging customers to switch to an energy fix now before the deals which will save you money against the price cap disappear.
Martin said: “People can and should save by switching: The cheapest year-long fixes on the market right now are about 7% LESS than the new October price cap, but they mightn’t be around long, That looks a good deal, as its currently predicted once rates go up they won’t come down.
“Don’t just jump on any fix though, if you’re going to lock-in you want to grab the cheapest for your use and location, so use a whole-of-market comparison, like MSE’s Cheap Energy Club, and find out who will let you fix for less.”
Martin also explained that a cheap fix now will actually push your bills up higher – about 2 percent higher.
But the slight increase now will pay off later, as when prices go up in October, your fix will be about 5 percent cheaper than the newly increased standard variable tariff which the price cap controls. So in essence it’s short term pain, long term gain, and a net saving overall.
Martin added: “Just a note on fixing, the confusion will be that actually grab a cheap fix now and you’ll pay 2%ish more than current price cap – but crucially far less than the new Oct price cap (and where it’s predicted to stay).
“Some saying “shouldn’t I wait until Oct then?” but we don’t know whether you’ll be able to fix at these rates then. This is all explained via the MSE cheap energy club comparison where we included predicted future price cap in the comparison.”
