Archive: MoneySavingExpert's Money Tips Email

ENDS THU: The cheapest energy fix, and it's now a HOTTER DEAL, as staying on the Price Cap looks to be costlier than previously thought
We've rebuilt our Cheap Energy Club so you can compare & get cashback

Yesterday, the Energy Price Cap (not N. Ireland) dropped by an average of 12% to its lowest level in two years, yet energy's still hideously costly. And worse, the prior predictions of a continued rapid drop have changed - now it's thought it'll still fall, but not as much or for as long. The prediction comes from analysts Cornwall Insight, which says the worsening is both due to wholesale rates (the rates energy suppliers pay) creeping up and regulator Ofgem allowing firms to recoup some more of the cost of supporting customers who can't pay bills.

• Our Cheap Energy Club's back, as you should COMPARE NOW before the cheapest fix ends. We've speedily rebuilt a stripped-back energy comparison, both as it's time to compare and as the cheapest fix for many is hidden on other sites (unless you're a member). Within it, Martin's designed a unique way that the around 90% of homes on the Price Cap can get a bespoke comparison of the Cap's predicted costs over the next year, compared to switching, so you can be fully tooled up to make the right decision. Here are just a couple of the key tariffs in there...
  
  - Ends Thu. Cheapest fix: EDF Essentials 1yr at an average 6% UNDER the new April Price Cap. New & existing Direct Debit customers, with or willing to get smart meters. For many, this is by far the cheapest standalone fix, ie, you're not forced to get other services - though prices vary with region and use. This tariff is 3% LESS than the prediction of where the Price Cap will be over the next year (see below) and, of course, as it's a fix it has the benefit of price certainty. It has low £50/fuel early-exit fees (waived if you switch to another EDF fix). If we can switch you via Cheap Energy Club, you get £20 cashback (£10/fuel).
  
  - A 3% discounted Price Cap (& now no exit fees): E.on Next Pledge. New & existing Direct Debit customers, with or willing to get smart meters. It's pledged to remain about 3% below the Price Cap for a year (£50/yr cheaper at typical use), so when the Cap changes, so does this. Therefore, if you're planning to stick on the Price Cap, this is a winner. The latest version has no early-exit penalties (if you're on the prior version, you can move to this for free, and your 12mth term restarts from the date you switch). Use your Cheap Energy Club-predicted Price Cap to see its cost (then take 3% off) or go direct to E.on Next Pledge.
  
  

  Please see the new Cheap Energy Club as a beta version

  We've rebuilt the club at super-speed, so it's not where we wanted it to be at relaunch, but we felt it more important to get it out so you can compare than to put the bells & whistles in. Please feed back on anything that doesn't work/make sense. For now, it's ONLY optimised for dual-fuel monthly Direct Debit price-capped users. If that's not you, while it shows your cheapest deals & price, other info including 'savings' explanations won't be right. We're working on that. In the meantime, be careful.

  
  
• Over the next year, it's now predicted the Price Cap will only be 3% less than now. On Thu 28 Mar, Cornwall Insight published its new predictions for the Energy Price Cap, and they were rather depressing. Prices aren't looking to drop anywhere near as much as had been thought. The further out you go, the less reliable the prediction.
  
  

  	Change (previous prediction)	The cost of £100 of energy in Jan-Mar 2024
  Previous: 1 Jan Price Cap	-	£100
  Current: 1 Apr Price Cap	DOWN 12.3%	£87.70
  1 Jul prediction	DOWN 7.7% (was down 13%)	£80.90
  1 Oct crystal ball prediction	UP 4.6% (was up 4%)	£84.70
  1 Jan crystal ball prediction	UP 0.2% (new prediction)	£84.80

  
  Overall, factor in seasonal usage and it's likely you'll pay around 3% less than the new April Price Cap (equivalent to 15% less than the Jan-to-Mar Cap). That's why the EDF fix looks so good, as it's actually cheaper than the current prediction and you get peace of mind that the price is locked in. Though within Cheap Energy Club, you will see a bespoke prediction of how the Price Cap will move based on your usage (it varies). For a further explanation, see our Should I fix? guide.

How to get the cheapest loans. Why, perversely, borrowing a little more could mean you repay quite a bit less...

There are no such things as absolute rules. We would always suggest you try to minimise any borrowing - yet there is one exception, it's a very specific one and it applies to cheap personal loans. It all stems from the fact that the more you borrow, the lower the interest rate - and this happens at certain specific amounts, where the rate steps down. Once you understand this you can, in some circumstances, use it to pay less even if you borrow more.

• Before we get into this, ONLY borrow if it's NEEDED, budgeted & affordable. Be very careful with any new borrowing. Ask yourself if you really need it - if not, don't do it. If you do, then do a budget to ensure you can afford the repayments. Aim to repay as quickly as you can, as that cuts the cost too.
  
  
• Next, look at the UK's cheapest FIXED unsecured loan rates. This is the cheapest borrowing that ISN'T 'secured' on your home (ie, so they can't just take your home if you can't repay). Don't just apply, go via our Cheap Loans Eligibility Calc, which will tell you which loans you're most likely to be accepted for, protecting your credit file, and includes some guaranteed rate loans. All the following are 'representative APR'.
  
  - £1,000 to £2,999: Santander* 13.5%, M&S* 14.9%. If you are borrowing this amount, read our 0% credit card loans guide first, as they may well be far cheaper.
  - £3,000 to £4,999: Santander* or M&S*, both 9.9%.
  - £5,000 to £7,499: Santander* 7.3%, Tesco* 7.3% (must have a Clubcard), Sainsbury's* 7.4% (must have Nectar).
  - £7,500 to £15,000: TSB 5.9%, Tesco* 6.1% (must have a Clubcard), Santander* 6.2%.
  - Looking to shift credit card debt? A balance transfer is likely cheaper.
  
  As these, like virtually all personal loans, are all 'representative APR', which means lenders only need to give 51% of accepted customers that rate - frustratingly, the rest can be charged an unlimited amount more. Worse still, the only way to find the rate you'll get is by applying, which marks your credit file. We continue to push for change.
  
  
• When borrowing more can cost you less. This isn't just about getting a lower interest rate, it's literally the specific points when borrowing more cuts the total repayments. To show how this works, here's an obvious example.
  
  Borrow £2,999 at 13.5% over 5yrs = £69/mth, a total of £4,140 repaid.
  Borrow £3,000 at 9.9% over 5yrs = £63/mth, a total of £3,815 repaid.
  
  So the first thing to do is to work out how little you need to borrow - try to minimise it. Once you've got that sum, check if you're near one of those interest rate steps where borrowing a little more saves you cash. And as it depends on the amount, rate and time, use our simple Loans Calc to work it out. Here are a few examples of how it looks, based on borrowing over 5 years at the cheapest rates...
  
  - Once you're borrowing over £2,770 (at 13.5%), you'd pay less if you borrowed £3,000 (at 9.9%).
  - Once you're borrowing over £4,710 (at 9.9%), you'd pay less if you borrowed £5,000 (at 7.3%).
  - Once you're borrowing over £7,260 (at 7.3%), you'd pay less if you borrowed £7,500 (at 5.9%).
  
  
• The odd fly in the ointment of this. It's easy to do these calculations in theory. The bigger issue is if the lender decides to charge you a higher rate than advertised, as it can do to up to 49% of accepted customers with representative rate loans. Of course, borrowing more at a much higher rate is a mistake.
  
  This can be exacerbated though, as with loans you apply for a specific amount, and acceptance can be tougher the more you apply for. It's unlikely to hinder many people substantially as we're only talking £100s more, but for completeness we wanted to note it.
  
  
• If you do get a loan, ensure you pay on time (preferably by Direct Debit) or you may be charged and get a missed payment on your credit report, which can cause real problems.