MARTIN Lewis has warned households not to switch energy providers amid rocketing costs.
The money saving guru tweeted to his followers yesterday: “DON’T SWITCH right now.”
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He sent out the urgent warning yesterday, which comes as a stark contract to his usual advice to shop around for the best deal.
But it’s because energy firms have been slammed for ramping up household bills by as much as 80%.
Since August, wholesale gas prices have gone up a staggering 70%, and suppliers have no choice but to pass on the costs or face going bust.
Unfortunately the latter has been the case for as many as 10 firms who have collapsed in recent weeks as a result of rising gas prices.
But it’s also meant households have been forcibly moved to new tariffs that are way dearer than what they were paying previously.
In the tweet, Martin outlined the average price of an annual fixed tariff a month ago compared to now, and how those costs align with the set price caps during those periods.
On October 1 the new energy price cap, set annually by Ofgem, came into force, meaning a hike of £139 in bills for many households.
It also meant the price cap rose from £1,138 a year to £1,277 which Martin addressed in his tweet.
Only a month ago providers could charge up to £1,138 for a standard variable tariff, though fixed rates can go beyond that.
With only a hike of £139 in the cap though, suppliers have tacked on almost another £600 to fixed tariffs in that space of time according to Martin’s figures.
He said that just one month ago the cheapest fix was £1,177 for someone with typical energy use, and that’s against the £1,138 a year price cap.
But now, a month later, the cheapest fix tariff is £1,700 a year against the £1,277 current price cap.
That’s a hike of £523 that a number of households will have encountered in the space of just four weeks.
We’ve got in touch with other consumer switching experts to get the latest on those figures, and will update this story once we know more.
In the meantime, Martin called the difference “Astronomical” and “Shocking”.
But he has remained certain that hard-done-by customers should not switch as you won’t find a cheaper deal available.
It’s thought that the default price cap will rise once again in April, so those who stick with their fixed rate now will end up paying a cheaper price once that rolls around.
It’s predicted to go up to £1,660, but if suppliers continue to charge extortionately, households could be feeling even more of a pinch if they move about now.
Martin Lewis explains what you need to do about energy bills as gas prices soar
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