Martin Lewis issues warning over ‘ugly’ energy price rises on the horizon
Summertime relief on bills is set to be wiped out by bills due to changes in Ofgem's price cap.
Bill-payers should act fast to shield themselves from rises in energy prices expected later this year, Martin Lewis has said.
Most households will start paying less for gas and electricity in July after regulator Ofgem cut its price cap by 7%.
But analysts warn this relief could be wiped out by wintertime, predicting a 12% increase in the cap when it comes up for review again in October.
Cornwall Insight say the changes are largely caused by unpredictable wholesale energy prices sharply falling then rising again in a short space of time.
Highlighting the forecast, the MoneySavingExpert guru said the predictions were ‘ugly’ news for consumers and ‘don’t make easy reading’.
‘If they’re right this is the last fall, and the coming rises are big.’
The rise is expected to hold fast throughout winter, with analysts predicting no change to the cap in January.
Writing on X, Mr Lewis said this means some fixed-rate tariffs currently available are a ‘decent bet’.
The cheapest fixes on offer are ‘currently 9% cheaper’ than what people will be paying before July’s price cap fall.
However, if prices defy predictions and continue to drop further, then people on fixed-price deals may find themselves stuck paying more depending on the exit fees they face.
Ofgem’s price cap has fallen significantly this year, notably with a 12% drop in April which brought it to its lowest level since early 2022.
Even after the expected rise in October, the average household’s annual bill will still be around £130 less than it was before April.
Mr Lewis also pointed that standing charges – the flat amount which must be paid monthly regardless of energy usage – are ‘virtually unchanged’.
For people who pay for gas and electricity via direct debit, this amounts to around £28 per month.
The fact that this figure is the same for each household means people who use less energy don’t benefit as much from price cap decreases compared to those who use more.
On the plus side, Mr Lewis added, a review of standing charges could take place soon.
The personal finance expert said he has been told the results of a consultation on the issue will be published this summer.
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