Switchers will save MORE than comparison sites show, warns Martin Lewis as energy price cap to be hiked by £96/yr

Today the energy regulator Ofgem has announced that the price cap for standard tariffs will be rising by £96/year to £1,138/year on average for someone with typical usage from 1 April 2020 (1).

Martin Lewis, founder of MoneySavingExpert.com, said: "Many will be shocked by the price cap rising £96/yr on a typical bill – the silver lining is that it will hopefully shock some people into action.

"The cap may be a ‘fair’ price, but it is far from a good one. Over the last few years, it has been on average at least £200 a year more than the cheapest tariffs for switchers, on average. This rise is really reverting it back to form – it was only artificially low until now on the back of the huge reduction in world energy prices, due to the early days of the pandemic.

"Yet there’s an important warning for the 10,000s who will flood towards comparison sites right now. These sites (including ours at MoneySavingExpert) won't show the right saving. The saving shown will be listed compared to the current price cap level, as if you’d stick on that for a year. It won’t include this big jump due to come, lasting at least six months, from April. That can only usually be factored in once energy firms publish their new, detailed rates for each region – which could be weeks away.

"So while I’d strongly urge everyone on a standard tariff to compare and find their cheapest supplier – don’t be put off by the relatively small saving shown. In reality it's likely to be much bigger."

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(1)   £1,138/year on average for someone on dual-fuel typical usage, paying by direct debit, from 1 April 2020.