Money-saving guru Martin Lewis has issued a crucial update for households across the UK, detailing the changes coming to energy bills as the new Ofgem Price Cap takes effect. While the cap is set to fall slightly from 1st January, he stresses that the financial burden on consumers remains severe compared to pre-crisis norms.
What the January Price Cap change means for your bills
The regulator's energy Price Cap is scheduled to drop by approximately 1% at the start of January. This marginal decrease will translate into a small reduction in the annual bill for an average household on a standard variable tariff. However, Martin Lewis was quick to temper any optimism, pointing out that this is not a major relief for financially strained families.
"Bills are still roughly double what they were just a few years ago for the average consumer," Lewis emphasised. He warned that despite the slight dip, costs remain significantly higher than the levels seen before the energy crisis began, creating a persistent 'new normal' of elevated household expenses.
Should you fix your energy tariff now?
In light of the current market, Lewis suggests that now might be the right time for some households to consider switching to a fixed-rate deal. Several providers have begun launching competitive fixed tariffs, which could offer protection against potential price spikes later in 2024. Consumers are advised to run the numbers carefully to see if locking in a rate provides them with certainty and potential savings over the variable cap.
It is vital to remember that the Price Cap is not an absolute limit on your total bill. Instead, it caps the unit rates and standing charges that suppliers can levy. Your final cost will always depend directly on how much gas and electricity you actually use, particularly during the high-consumption winter months.
Essential meter reading advice for New Year
Martin Lewis offered one clear, actionable piece of advice for all customers: take a meter reading on or around New Year's Eve. Submitting an accurate reading as the new Price Cap comes into force ensures your energy company bills you at the correct, slightly lower January rates. This simple step prevents suppliers from estimating your usage and potentially charging you at the older, more expensive December rates for energy consumed in the new period.
Looking ahead, market analysts predict that energy prices will remain relatively stable in the near term, but at a high plateau. Households are encouraged to continue with energy-saving measures and to check for any available government support or grants they may be eligible for.
