Martin Lewis shares urgent advice as energy bills set to soar in October
Martin Lewis has issued urgent energy saving advice as he warned many homes are heading for "energy bill disaster" in the coming months.
The MoneySavingExpert founder said energy bills could hit an eye-watering £3,300 on average this winter as the cost of living crisis continues to hit families across the UK.
He said this winter “will be bleak” for many and has shared advice to help families prepare for the price hike in October.
How much will energy bills go up in October?
Mr Lewis said if you pay £50 a month now, you are set to pay £85 a month from October when the energy price cap goes up.
Latest predictions from analysts at Cornwall Insight suggest the cap could rise to £3,244 - up from the £3,003 figure they estimated just two weeks ago.
If you pay £150 a month now, you are predicted to pay £250 a month from October.
Those paying £200 a month currently will face bills of £330 a month, and those paying £300 on energy per month face a rise to £495.
The Ofgem price cap is currently set at £1,971 and covers 22 million households.
The cap sets a limit on how high variable-rate energy bills can be for average use households paying by direct debit.
Mr Lewis said: “This price cap is mostly predictable as it is dictated by regulator Ofgem’s published algorithm, based mainly on year-ahead wholesale prices.
“These have spiked in recent weeks, so analysts Cornwall Insight’s latest predictions are frightening.”
What does Martin Lewis advise?
The MoneySavingExpert described the coming winter as “bleak” and warned the “cost of living is set to climax in catastrophe, unless there is further intervention”.
He advised households to set aside any cash if they are able before energy bills rise again.
Speaking in this week’s MoneySavingExpert email, he said: "I know that’s a pipe dream for many. Yet for those who do have savings or currently spend less than you earn, putting some aside or even asking for your energy direct debit to rise should ease the winter cash-flow pain.”
With variable-rate energy deals you pay for the energy you use - so the more units you consume, the more you pay. With that in mind, Mr Lewis said it makes sense to cut energy use if possible.
MoneySavingExpert’s tip to reduce energy bills included fitting a water-saving shower head as these can cut energy use by 2% a year.
Spending one minute less in the shower could also save an astonishing £75 a year in energy costs for a family of four, and can also save around £105 in water bills.
Picking energy-saving bulbs is another top tip, as LED bulbs use half the power of the spiral fluorescent varieties, and ditching your tumble dryer is another good way to save cash.
The Energy Saving Trust thinks you could save £60 a year by air-drying your clothes, if possible.
How do you know if a fixed rate is right for you?
More than 80% of UK households are now on variable-rate deals. This is mostly because the price of variable-rate deals are limited by the Ofgem price cap, but also because there are very few fixed rate options on the market.
Currently, there are very few that are cheaper than the variable rate ones.
Mr Lewis added: "Based on those predictions, over the next year you’ll pay 57% more than the current price cap for energy."
“If you can find a fix at less than that, it’s worth considering".