Martin Lewis warns consumers not to 'just jump on a fix' costing less than their current bills as energy switching market slowly comes back to life

With no cheaper fixed deals to switch to under the Energy Price Cap (EPC) and the Energy Price Guarantee (EPG) for the last year, Ovo has today launched a one-year fix for existing customers that undercuts the EPG level of £2,500 a year.

But with bills expected to fall in July and limited accessibility to the offer, Martin Lewis explains what to watch out for and how the deal stacks up. See MSE's latest news story.

Martin Lewis, founder of MoneySavingExpert, said: "People need to be very careful not to just jump on a fix because it costs less than they're paying right now. If you're on a standard tariff, the rates you pay are governed by a cap. That cap is currently set by the Energy Price Guarantee, and will stay roughly stable until the end of June.

"After that, because wholesale rates – the rates energy firms pay – have dropped, it's likely the Price Cap will drop, and on current predictions that means you'll start paying 20% lower rates than now. That price is predicted to stay around that point until the end of the year, and into early 2024, though it changes every three months and the further ahead you get, the hazier the crystal ball gets.

"So based on those predictions, unless a fix is more than 15% cheaper than your current standard tariff – and this one isn't – it's unlikely to be cheaper over the year. Having said that, these are just predictions, things can change rapidly, and the one advantage of a fix is you get price certainty, so if you really value that, you may decide to fix even at a higher rate.

"As an aside, it's worth knowing the Government has a limit in place on how much the cap can rise to in the worst-case scenario (a cap on the cap, if you like). So if wholesale rates were to explode again – which isn't currently seen as likely – the maximum the rate could rise until April 2024 is 20% more than the current price."

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