Martin Lewis' Money Saving Expert (MSE) has issued a warning to customers of British Gas, Octopus, Eon, and other energy suppliers, describing the latest Energy Price Cap announcement as 'not good'. Ofgem has confirmed that from July, the typical household energy bill will surge by £221 a year, rising by 13% to £1,862. This increase adds to the cost-of-living pressures on families across the UK.
Summer Increase, Winter Worries
While energy usage is typically lower during the summer months, the new cap will still impact household budgets. The situation is worsened by the ongoing conflict in Iran, which has driven up wholesale gas and electricity costs by around 45% during the assessment period from February 18 to May 18. MSE commentators noted that the increase is 'not good, but not catastrophic' for summer, as households use about 15% of their annual energy during this period. For someone paying £150 per month, the hike could add £30 to £40 over three months. However, the main concern is whether high prices will persist into winter, when energy consumption rises significantly. Current predictions suggest a further 4.5% increase in October, though this is uncertain.
Advice for Consumers
MSE advises that customers on standard variable tariffs, which are often called 'Standard Variable' or 'Flexible' tariffs, will be affected by the Price Cap. They recommend that risk-averse consumers consider fixing their energy prices now to lock in rates for a year. While cheaper deals may appear in the coming weeks, there is no guarantee. Currently, only three fixed-rate tariffs are cheaper than the current Price Cap, undercutting it by up to 4%. By fixing, consumers can save a small amount now and protect themselves against upcoming hikes, where the saving could be around 15% on average.
The warning comes as households brace for higher costs, with energy bills set to rise significantly from July. MSE continues to provide guidance on how to manage energy expenses during these challenging times.
