Martin Lewis issues advice on the right time to make an energy switch

Martin Lewis explains to ITV News what people should be looking for in a fixed rate deal if they are planning to save money

Ofgem’s price cap cut raises the possibility that consumers could soon be able to switch energy suppliers again if firms compete for business on the back of falling wholesale prices.

Consumers have been unable to switch tariffs for well over a year now, as bills soared so high the government had to bring in an energy guarantee lower than the regulator's price cap.

But on Thursday, Ofgem announced a drop to its energy price cap from the current £3,280 per year to £2,074 for households in England, Scotland and Wales, which will kick in from July.

The current price cap is higher than the Government’s Energy Price Guarantee (EPG), which had partly shielded households from the most recent price surges.

The EPG limited annual energy costs to £2,500 for the average household- subsidising Ofgem’s price cap.Ofgem’s latest cut means its cap will again govern household bills, resulting in a reduction of around £426 a year from a typical household's energy bills to £2,074 – a fall of about 17%.

Ofgem chief executive Jonathan Brearley believes that consumers could see the return of fixed tariff deals by the second half of this year, something that could provide customers with additional options to manage their energy costs.

Do experts suggest switching to fixed rate deals?

As food prices continue to hit record highs and inflation shows little sign of shrinking, consumers will be looking to save money wherever they can.

And now that there is some short term stability in the energy price market, the return of fixed rate deals could provide customers with a chance at finding a more cost-effective deal than they currently have.

Speaking to ITV News, Martin Lewis said: "The big change that we may be coming in the next

few weeks is we will start to see is fixed tariffs relaunching, so people will be able to switch.

"The real question though is what will they be priced at."

Lewis added: "Now, when you look at the current predictions for energy, you probably don't want to fix for much more than the July price cap.

"So if you can get a fixed deal at the July prices it is probably a really good idea. A few percent above that is also a good idea. Anything more than that, based on current predictions you'll probably pay more if you fixed above that."

When prices rocketed last year, some households took out highly priced fixed rate deals in order to protect themselves, which Lewis has suggested ditching, even if it costs money to do so.

He said: "This time last year, with prices rocketing, some people took very high fixed-rate deals.

“Then the government launched the Energy Price Guarantee and, for fairness, those whose fixes were more expensive than the EPG had their tariffs subsidised so they dropped to the same level.

“From July as the EPG subsidy will be set as zero, that subsidy will be removed and those fixes will go back to their original price.

“For people on those fixes, it is worth considering switching to a price-capped standard tariff – possibly even if you need to pay exit fees.”

The return of fixed energy tariffs?Comparison and switching site Uswitch said it sees no reason why suppliers cannot offer competitive fixed deals around the £2,000 mark.

Natalie Mathie, energy spokeswoman at, said: “The first price cap drop in two years is confirmation that the tide is finally turning for long-suffering energy customers.

“The average household can expect monthly direct debits to be set at £173, although typical seasonal usage may only see you spend £110 a month over the summer.

“While this is good news, the majority of homes are on standard variable tariffs and now subject to the volatility of price cap changes every three months.

“This is a watershed moment for energy suppliers who can now look to start offering fixed deals again, given the market conditions – and would help to encourage genuine competition in the retail energy market.

“Customers should have the choice of whether to lock in the benefits of lower wholesale prices for 12 months, just as they do in the mortgage market. If deals are priced fairly, this could offer much needed peace of mind, particularly over the high usage winter period.

“We see no reason why energy suppliers cannot offer competitive fixed deals around the £2,000 level.

“After a long spell of having no option but to try to reduce their usage at home, now is the time for energy customers to start paying attention to the market again.”

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