The consumer expert says anyone whose fixed deal is coming to an end this week could be in for a shock – as the cheapest tariffs have mounted 40% in a year
Martin Lewis has issued an ’emergency’ warning to thousands of households amid an energy price surge that could cost customers hundreds of pounds more in the coming weeks.
The warning follows a 250% leap in gas wholesale prices which has led to the collapse of four energy companies – with Bulb the latest to be forced into bailout talks.
The consumer expert told MSE followers that anyone coming off cheap, fixed energy deals in the coming days and weeks could be in for a surprise – with even the cheapest tariffs now costing 40% more than they did last year.
The lack of deals has been so severe that comparison website Compare the Market was forced to suspend its cheap tariffs finder last week.
Energy prices are largely based on supply and demand, and the latest increase is down to a spike in gas use, low wind speeds in Europe and power station closures, as well as a fire in Kent which cut off power supplies from France.
Combined, these have created the perfect storm for a record rise in wholesale costs.
Martin Lewis said: “Energy bills have risen to an unprecedented level.
“We’ve never seen anything like what’s happening right now.
“Wholesale prices – those energy firms pay – have gone up by four times compared to nearly 20 months ago and that’s going to feed into domestic prices.”
He goes on to share some advice to customers to help minimise the disruption on their finances.
“So this isn’t a video, I’m afraid, about cutting your bills and making them lower. This is about damage limitation – how do you stop a huge increase?”
Lewis said customers who are approaching the end of their tariff have two options to keep their bills to a minimum.
A) Don’t do anything: Stick with the price cap for six months as prices could fall next year when you’ll be able to lock a cheap deal in again.
B) Act fast: Lock in the cheapest one or two-year fixed deals now, however with gas rising by the day, you’ll have to act immediately. Find out how, here. “You have to look at the whole market,” he said. “Check all comparison websites as these focus on commercial partnership deals.”
Those struggling are also advised to find out if they qualify for the Warm Home Discount which could knock £140 off their winter bills.
Today, Bulb warned it is in crisis talks in what could make it the fifth supplier to stopped trading in just weeks.
Four more are predicted to follow because they cannot shoulder the rising cost of wholesale prices.
If a supplier collapses, you won’t be left without energy. Regulator Ofgem will arrange an alternative provider and your credit and balance will be transferred across. In the meantime, you’ll have to take a meter reading.
Are energy prices out of control? Let us know your thoughts in the comments below
How the gas shortage affects you
How much will I pay if I stick to the price cap?
Variable tariffs are often what you’re rolled onto when your fixed term ends.
Around 11 million households on these tariffs will see their bills rise by around £139 a year (or £153 for prepay meters) from October 1 in line with latest price cap.
These are based on typical usages – so your actual bill will vary depending on your usage
See our guide on how to switch and save on your energy bill, here.
To find out the best deal for your household, see our guide on how to switch your energy supplier.