Energy prices are hitting record highs with bills set to soar to “unprecedented levels”.
Martin Lewis issued a 5-step warning for Brits to protect themselves from the rising energy prices.
Writing in his weekly newsletter, the Money Saving Expert told his millions of readers that things have become worse.
He said: “I warned you the energy market was dire. Now, sadly, it’s got far worse.”
Four energy suppliers have stopped trading in the past month, with more expected to collapse by Sunday.
The government announced that it has stopped plans to rescue energy suppliers and that the energy price cap will not be lifted.
Customers will be given loans if their supplier goes under, but they won’t lose credit if the company goes bankrupt.
(Image: Getty Images/iStockphoto)
Martin said: “The cheapest fixes are 60% costlier than a year ago.
“Wholesale gas prices are up fourfold in a year and electricity prices are hit too.”
He added that while any energy savings are limited, damage limitation can be done.
Here are five things Martin says in his weekly newsletter you’ll need to know about the energy price surge.
1. Bills will rise on October 1
The energy price cap might be in place, but it’s rising on October 1.
Martin warned: “If you’ve never switched, or have come off a fixed or special tariff, you’re likely on the default standard tariff.”
2. More price rises are brewing
The price cap is rising because of a jump in wholesale costs earlier this year, but they could jump further next year.
Ofgem will announce this in February. It is expected to enter into effect on April 1, 2022.
Martin added: “The price cap could jump again to a stomach-churning £1,450 a year based on typical use.
“We’re nearly a third through the next assessment period (Aug – Jan), which determines the cap from Apr 2022, is crucial.”
(Image: Getty Images/iStockphoto)
3. Anyone coming off a fixed deal will pay more
The fact that prices are up 60% in a year means anyone coming off a fixed tariff could be impacted.
Martin says the idea of “saving” compared to what you were paying has gone for now.
You could either wait for the deal to expire or grab it as soon as possible to lock in the lowest fixed price.
4. Do you need to extend your fixed rate?
Martin said that you shouldn’t.
He continued: “Prices have risen so much the savings you’ll make by sticking with your old cheap tariff, while it lasts, will be huge.
“Even if prices still rise, I suspect the gain of holding on to cheap tariffs now will likely outweigh that.”
5. Should you avoid small providers?
Half a million homes were left in limbo when People’s Energy & Utility Point collapsed last week.
Martin said: “The government said that it will not bail them out. It is quite normal for some firms to fall.
“Yet some business experts predict if nowt changes about 30 more may go, leaving only 10 – far from normal.
“Predicting when and where they’ll go is hard because once a company becomes insolvent, it must declare it. There’s not much warning.
“If your supplier does go bust, the Ofgem safety net means you won’t lose supply, you’ll be moved to a new firm.
“Your credit is protected. Instead of moving to the price limit, it is one of inconvenience, delay and hassle.
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