Advertisement

Energy bills: Martin Lewis says fixed-rate deals will return 'imminently'

Martin Lewis said fixed-rate energy deals could return soon. (PA)
Martin Lewis said fixed-rate energy deals could return soon. (PA)

Martin Lewis has said he expects fixed-rate energy deals could return to the market "imminently" as prices start to fall - but urged customers to be careful before they commit to a new rate.

The consumer champion made the prediction in response to chancellor Jeremy Hunt's budget, in which he promised to extend the energy price guarantee at its current cap of £2,500 for three more months, delaying the planned rise to £3,000.

If the rise had gone ahead households across the country could have seen their energy bills go up by around 20%.

Lewis' statement matches predictions from energy market analysts Cornwall Insights and regulator Ofgem.

Kate Mulvany, senior consultant at Cornwall Insight, said: "There is a good chance that suppliers will be able to offer fixed tariffs that compete with the capped government prices, reviving the benefits of switching suppliers".

Read more: Energy bills: Martin Lewis explains post-budget changes to gas and electricity prices

Rising energy bills have been difficult for many households to stomach. (Getty)
Rising energy bills have been difficult for many households to stomach. (Getty)

"Although such an outcome is subject to wholesale market volatility, early indications are that suppliers may be able to offer competitively priced tariffs within a matter of weeks."

Cornwall Insight also predicted a boom in people switching providers as soon as the market begins to reappear with millions of people who would have been expected to switch if there wasn't a crisis primed to do so.

Currently, no energy providers are offering fixed-rate deals better than the government-subsidised energy price guarantee.

Read more: Budget 2023: Jeremy Hunt's 'hidden cuts' to public sector revealed

Chancellor Jeremy Hunt kept the energy price cap at current levels during the budget. (PA)
Chancellor Jeremy Hunt kept the energy price cap at current levels during the budget. (PA)

Fixed deals mostly disappeared from the market when energy prices began soaring last autumn, with many smaller retailers going out of business.

Should you switch to a fixed-rate deal when they become available?

Lewis said it would be a "difficult call to make" on whether taking a fixed-rate deal would be financially beneficial.

He pointed to current estimates that the average price of gas for a household currently sits at £2,500 per year and is expected to fall to around £2,000 by July.

He said this means if you were to take a fixed-rate deal now it would only be a financially sensible decision if it was offered at £2,150 per year or below for somebody on typical use and even then it might not save the customer money.

Fixed-rate energy deals could save people money but the market is hard to predict. (Getty)
Fixed-rate energy deals could save people money but the market is hard to predict. (Getty)

Last month, Ofgem also urged caution about leaping onto a fixed-rate deal when they reappear.

Ofgem CEO Jonathan Brearley said: "I would encourage all customers to examine any offer carefully, and ensure they consider the potential for the price cap to fall later in the year."

Lewis, Ofgem and Cornwall Insight all warned the volatility of the energy market cannot be overstated.

The war in Ukraine and subsequent sanctions on the Russian economy are still ongoing with no end in sight.

With the conflict heavily tied to the price of energy, predictions of future prices are difficult.