Martin Lewis is warning Brits that they could see their bills go up even further next April, as a new price cap comes into force.
The personal finance expert knows for MoneySavingExpert said in the Martin Lewis Money Saving Show on ITV that ‘the energy market is in crisis’. The pressures of the increase in gas prices have already be felt by suppliers who have gone bust and will impact bill payers across the country in the coming months.
Of course, following energy-saving tips can help you reduce your bills, but as Martin Lewis explained, the energy market is undergoing drastic changes. The ‘cheapest fixes’ now costing ’60 per cent more than a year ago,’ he explained.
He also pointed out that ‘Six suppliers have gone bust in a fortnight and if things don’t improve, many, many more may follow, leaving few left.’
Martin Lewis April energy warning
In a nutshell, the personal expert said that we’re all going to be paying ‘a lot more’ for our bills, and that’s on top of prices already going this October. Most households will see a 12 per cent bill increase in the coming weeks.
‘What no-one is telling you and what’s most important is what happens next,’ the money guru said. ‘Because the price cap changes every six months and it’s important to know that the current price cap is based on wholesale prices from the beginning of February until the end of July.’
‘But on the first of April next year we will have a new price cap and that is based on the current wholesale prices all the way up to the end of January.’
Citing the energy thinktank Cornwall Insight, Lewis explained that in April, the price cap will rise to a very high £1,455 per year – a 14 per cent increase on top of the October one.
Switching isn’t necessarily the answer right now
If you’re wondering what to do if your energy supplier goes bust, or how to mitigate the effects of the price hikes, Lewis has sobering advice. ‘There is nothing that you can switch to that is cheaper, variable or fixed, he said.
If you’re already on a fixed price energy contract, the effects of the price hikes will be mitigated, although if prices suddenly come down, you could still end up paying more.
‘Come next April, if wholesale prices have dropped because of the time-lag, you’re still going to be on a high price, so then it could be destructive,’ he says.
This doesn’t mean you shouldn’t still have a look around for the cheapest fixed-price energy contracts. However, just be aware that you may not find any that are better than the tariff that you are already on.
If you do find a better tariff, bear in mind that it can take three weeks to switch, so don’t delay.