Martin Lewis issues warning to households after Ofgem energy price cap update
Martin Lewis has explained what happens next after it was confirmed the Ofgem energy price cap will fall by 7% from this July, taking the typical household bill from £1,849 to £1,720 a year
Martin Lewis has reacted to the latest Ofgem price cap announcement - and while energy bills are falling, the money-saving expert urged households to still shop around for a better deal.
The Ofgem energy price cap will fall by 7% from this July, taking the typical household bill from £1,849 to £1,720 a year. The price cap sets the maximum unit rates and standing charges - so your bill is still depending on how much energy you use.
In a post published today on social media, Martin Lewis explained that for every £100 a month you pay for energy now, this will reduce to around £93 from July.
However, the MoneySavingExpert.com founder said the price cap is still a "pants cap" as there are cheaper fixed deals available. He said: "Today's announcement that the price cap is to fall by 7%, is welcome, but nothing to shout home about.
"All this really does is reverse April's rise so it's back to roughly the cost at the start of the year. Crucially energy bills this July will still be 10% higher than at the same time last year."
He continued: "Compare these falls to the cheapest fixes on the market today, which are 18% below the current cap, showing the price cap is a pants cap.
"It was only ever meant to be a back-stop tariff for those unable to switch, yet during the energy crisis it effectively became a regulated price, and still today, 65% of homes are on tariffs dictated by the cap."
However, he also issued a word of warning for those who want to compare deals elsewhere. He said: "Comparison sites will currently show your savings compared to the current price cap (as firms new tariffs aren't published yet), not the one it'll drop to in July.
"That means savings will be exaggerated by 7%, and you need to factor that into your calculations."
Tim Jarvis, Director General of Markets at Ofgem, said: 'A fall in the price cap will be welcome news for consumers, and reflects a reduction in the international price of wholesale gas.
'However, we're acutely aware that prices remain high, and some continue to struggle with the cost of energy. The first thing I want to remind people is that you don't have to pay the price cap.
"There are better deals out there so it's important to shop around, and talk to your existing supplier about the best deal they can offer you. And changing your payment method to direct debit or smart pay as you go can save you up to £136.'
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