Martin Lewis’ MSE shares advice to save 11% on bills before energy price cap hike

Act now to avoid the hike (Picture: Shutterstock/Getty) Today, Ofgem confirmed the UK’s energy price cap will go up by 4% on October 1, adding an extra £60 a year to the typical dual fuel bill. The regulator blamed the latest rise — which Martin Lewis said ‘would’ve been even worse’ without the recent domestic electricity VAT cut — on ‘volatile global gas markets’ caused by the ongoing Middle East conflict. Around 65% of households in England, Scotland and Wales will be impacted by the change, which pushes prices to their highest level in three years. Director general of markets at Ofgem, Neil Kenward, said in a statement: ‘High international gas prices are continuing to drive energy costs in the UK. We welcome the Government’s intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter.’ The turbulence may not end here either, as Martin explained on X: ‘The cap only lasts three months and changes again on January 1, 2027, and sadly it’s currently predicted to rise substantially again then, though that’s a bit of crystal-ball gazing.’ Thankfully though, there is a way to potentially avoid the worst of these increases — but Money Saving Expert (MSE) claims it all comes down to ‘how risk averse you are and your current situation.’ A simple switch could save you hundreds (Picture: Getty Images) According to MSE, the cheapest fixed deals available right now are about 8% less than the current cap (or around 11% less than it’ll be from October) so acting now could really pay. As such, the team says that if your tariff is determined by the Ofgem price, ‘the risk averse thing to do right now is to fix your energy, as this will lock in your rates for a year.’ However, there are some caveats to this. What is the energy price cap? The energy price cap sets the maximum limit suppliers can charge people for their energy use. The upcoming cap, which applies between October 1 and December 31, comes in at £1,723 per year for a household who uses the ‘typical’ amount of electricity and gas and pays by Direct Debit. In comparison, the previous cap between July 1 and September 30 was £1,663. Here are the numbers broken down: Gas Current average unit rate: 7.33p per kilowatt hour (kWh) Average unit rate from October 1: 7.97p per kilowatt hour (kWh) – up 8.7% Current average standing charge: 29.04p per day Average standing charge from October 1: 29.68p per day – up 2.2% Electricity Current average unit rate: 26.11p per kWh Average unit rate from October 1: 26.32p per kWh – up 0.8% Current average standing charge: 57.19p per day Average standing charge from October 1: 54.83p per day – down 4.1% Ask Metro Use AI to go deeper into the stories you care about – powered by Metro and trusted publications. For one, you shouldn’t ‘just grab any fix’. It needs to be at the very least cheaper than the current cap to protect yourself from future increases —and these offers are going fast. Martin also warns that ‘fixes were quite a bit cheaper about six weeks ago’, so ‘if, and it’s a big if, things in the Middle East settle down you may be able to fix at far lower prices in future.’ With that in mind, he advises that for ‘someone who has been on the standard tariff for ages, then the safest thing is just to get a cheap fix now,’ while ‘if you’re a regular fixer who’ll monitor the market, there’s a chance waiting may turn out to be better.’ How to switch to a fixed energy tariff Since your cheapest fix depends on where you live and how much you use, it’s a good idea to start off by putting your details into a comparison tool (like MSE’s Cheap Energy Club). Once you’ve looked at what’s available to you, choose the best option and go through the steps shown by the provider. Just make sure to double check whether your smart meter will continue to work in smart mode afterwards, and that you aren’t on an existing contract that could incur exit fees. Regardless of which deal you choose though, the new price cap will come into play on October 1 and will last for three months, so if you’re going to make the the switch, it should be before then. Popular price capped tariffs If you’re on one of the following deals, what you pay is determined by the price cap: British Gas Standard Variable EDF Standard (Variable) E.on Next Next Flex Octopus Flexible Octopus Ovo Simpler Energy Scottish Power Standard Alongside fixed rate tariffs, it’s worth looking into specialist alternatives that could save you cash. For example, British Gas offers a special tracker deal, which discount up to £60 off the annual standing charge (potentially saving you more if you have low usage). Alternatively, there are electric vehicle tariffs which could help EV drivers keep costs down, and rapid price-change options offering lower prices outside of peak periods for those who are able to shift their daily energy routine. What if I’m already on a fixed price tariff? MSE also shared specific advice for those already on a fixed deal. If yours is ending in less than 50 days, you can’t be charged exit fees, so are ‘free to ditch it and switch.’ That said, since not many cheap tariffs are left below the cap, ‘you may be better waiting and regularly doing a comparison to see if cheaper fixes become available over the next few weeks.’ Just make sure you do get sorted with a new one before your current contract ends, as otherwise you’ll be rolled onto your supplier’s standard variable option. Got more than 50 days left on your fix? MSE explains: ‘Now might not be the best time to think about switching, as ditching your current deal and getting another fix will likely mean you’ll pay more and will almost certainly have to pay early exit fees.’ How can I lower my energy bills? Amy Knight, personal finance expert at the financial comparison website NerdWallet UK, told Metro: ‘While cutting down on energy use can help save money on bills, this isn’t always an option. Instead, focus on getting more value from the money you spend heating your home.’ Here are her top tips to keep fuel bills low: Ask for a refund if you’re overpaying into your energy bill by direct debit If you’re several hundreds or even thousands in credit, your direct debit is probably set too high. You can ask for a refund of most of the balance and adjust your direct debit to be lower. Be aware though, it is normal to be in credit this time of year because most households use less energy in the summer versus the winter when we have the heating on. How hot do you need your water? Heating water uses a lot of energy, so you can turn down the flow temperature of your boiler to shave a little off your bills. As long as the water from your hot tap is comfortable to have a bath in, you don’t need to set it any hotter. You can do this manually or you may be able to ask a heating engineer to fit a device called a ‘weather compensator’. Remember where warm air comes from Keep radiators uncovered to maximise the benefit when they’re on. If you have long curtains covering your radiators, leave them open to make sure the warm air circulates into the room, not out of the window. Look at the label When shopping for a new appliance such as a washing machine or fridge, look at the efficiency ratings. If your budget can stretch to A or B-rated white goods, these can help lower your energy usage long term. 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