Martin Lewis offers emergency advice in the event of an energy crisis – see the top 9 must-haves
Martin Lewis, the MoneySavingExpert, revealed his nine essentials for dealing with the current energy crisis.
Mr Lewis warned two weeks ago that the energy market was in a “catastrophic” situation and that things have only gotten worse.
Now he offers his top tips to help lessen the impact on you.
The energy price cap will jump
The cap is expected to increase by an average of 12%, which could lead to an increase of £ 140 for a person with typical use.
Mr Lewis said: “If you have never changed or if you have given up on a fixed or special tariff, you are probably on the default standard tariff from your energy supplier.
“This price is dictated by the so-called price cap of the regulator Ofgem (except in Northern Ireland).
“In fact, it’s not a cap on the price, it’s more of a cap on the rate you pay per unit, so if you use more, you’ll pay more.”
Price cap could jump again in April
The price cap changes every October and April, but the evaluation period for deciding the cap is earlier, which means you can already estimate by how much the cap will increase in April.
The MoneySavingExpert said: “At current rates, Cornwall Insight analysts are forecasting another 14% jump then, taking it to £ 1,455 per year (on typical bills).
“In fact, in order for prices not to rise in April, wholesale rates for the last four months of the assessment period are expected to drop to roughly pandemic lows. Still, many analysts believe they remain high for now.
You’ll pay more if you’re on a cheap deal now
Mr Lewis said: “Prepare to be horrified – the cheapest solutions today are 60% more than a year ago.
“The idea of ’saving’ over what you pay is gone for now. ”
The big choice to make
Whether you’re on the price cap or launching a fix, the options are pretty tough.
The two main options are to stick with a capped or variable rate, with the risk that if you’re still there in April and prices have come down, you’re paying massively too much.
Or you can go for the cheapest possible solution, which will probably last more than two years, probably showing that the market only takes its prices into account in the short run.
The MoneySavingExpert said, “Without a crystal ball, I can’t tell you for sure which one will be better. So you have to decide based on your attitude to price versus certainty. ”
Mr. Lewis explains the options in detail here.
Skip my cheap fix?
Martin Lewis said his best guess is that you shouldn’t change if you still have a few months to use your cheap solution.
He said: “The prices have gone up so much that the savings you will make by keeping your old cheap fare, while it lasts, will be huge (but compare to verify).
“So even if prices continue to rise, I suspect that the gain from keeping prices very low now will likely outweigh that. It’s more art than science.
Should I avoid small suppliers?
In recent weeks, People’s Energy and Utility Point have gone bankrupt and the government has said it will not bail them out.
Trade experts warn that if nothing changes, 30 more companies could disappear.
Mr Lewis said: “Predicting what will go and when is difficult because as soon as a company knows it is insolvent it has to report it, so there is little advance warning.
“If your supplier goes bankrupt, Ofgem’s safety net means you won’t lose supply, you will be transferred to a new business and your credit is protected.
“The risk is one of delay, hassle and loss of whatever cheap fare you’re on, instead of being moved to the price cap.”
Watch out for comparators
Most comparison sites will hide offers that don’t pay them, and most cheap deals don’t pay them right now.
Martin Lewis explained: “Right now, in these extraordinary times, many of the cheapest companies have taken payments. This means that most sites hide a wide range of cheap fares by default.
He recommends using his Cheap Energy Club comparison, which doesn’t filter out cheap offers.
Help is available if you are having difficulty
Martin Lewis said: “The emergency measures put in place due to the coronavirus are still ongoing. Your supply won’t be interrupted – standard credit meter disconnections have been suspended, while prepaid customers can get emergency credit to make sure the lights stay on.
“There is also a range of options that providers can offer, including payment plan revisions, payment interruptions or reductions. This is all done on a case-by-case basis, so contact your provider as soon as possible if you start having difficulty and let them know if you are vulnerable.
Use less, pay less
The MoneySavingExpert said: “Most people (sometimes including me) waste energy. We know that wearing jumpers, turning down thermostats, and not leaving electrical devices on standby will help. And maybe these price hikes can change behavior.