The energy price cap rises by 54 per cent on Friday April 1
Financing visionary Martin Lewis has detailed the three essential things you need to do before the energy price cap rises by 54 per cent on Friday.
Come April 1, Ofgem will increase its price cap. Direct debit customers can expect to see an increase of £693, from £1,277 to £1,971 – and prepayment customers will see an increase of £708, from £1309 50 £2,017.
Having previously said that the cost of living is at its worst in 22 years, MoneySavingExpert founder Lewis has issued three distinct things to get done before Friday.
Take a meter reading
Lewis first urges people to take a meter reading on March 31 in order to inform their energy provider of their current usage. Essentially, you’re “drawing a line in the sand that says to them: all the energy I have used until this point should be charged at the cheap rate.”
He added: “Do not estimate my usage, I am locking it down so you cannot charge me any more than the amount I’ve actually used from 1 April onwards.”
Don’t cancel your direct debit
Fearing that many are considering cancelling their direct debits in a bid to control their outgoings, Lewis has warned that this could actually cost you more.
Related Link: Martin Lewis issues warning against cancelling energy direct debit ahead of price hike
“If you’re on typical usage, the price cap from 1 April – for somebody paying by direct debit – is £1,971 a year,” he explained. “If you want to pay by quarterly bills, and that’s what most people ditching direct debit tell me they’re thinking of doing, then the price cap is £2,100.”
He added: “So that means you’re paying over 6% more for the same usage than you do by direct debit, because there is a discount allowed for direct debit.”
Don’t fix into a deal
Energy bills are going to keep rising and Cornwall Insight analysts predict that October will see another cap increase of 29 per cent, which could bolster annual energy bills to an eye-watering £2,512. Martin explained that you’d need a fixed deal more than 20 per cent above April’s price cap for it to be worth it.
However, the cheapest open market deal is around 40 per cent more than April’s price cap.
Lewis explained: “It is not worth fixing. You’re better off to stay on the April price cap and then if nothing changes before that, go on to the new October price cap.
“Again, this is my best guess, I do not have certainty or surety here – it is a bit of crystal ball gazing.”
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