Thread by @MartinSLewis

NEWS. ENERGY PRICE CAP TO RISE 10% on 1 OCT. (pls share). Here's my instant briefing incl who it'll hit hardest, why govt needs change winter fuel payments, standing charges & WHAT TO DO NOW. First, here's the average Direct Debit Cap (it varies by region)

ELEC
- Standing charge 60.99p daily (from 60.12p) UP 1.4%
- Unit charge: 24.5p per KwH (from 22.36p) UP 9.6%
GAS
- Standing charge: 31.66p daily (from 31.41p) UP 0.8%
- Unit charge: 6.24p per KwH (from 5.48p) UP 14%

Prices nearly double pre-crisis: This rise means this winter many will still be paying nearly double what they were pre-crisis. From 1 October, the vast majority of homes in England, Scotland & Wales will see costs jump 10% – so for every £100 you pay today, you’ll typically pay £110.

To be more accurate, as most of the rise is on the unit rate not standing charge, higher users especially those with gas, will overall see their costs rise by more than 10% rise, lower users less.

Govt must rethink Winter Fuel Payments or almost ALL pensioners will need to find £100s more than last winter. While energy will cost less than during last winter’s crisis time, the reduction in rates only equates to a drop of roughly £100 over the six winter months for a household with typical usage. Yet specific pensioner energy support has dropped by far more...

Last year pensioner homes got up to £300 extra per household cost of living support - that’s gone, and its loss alone is far bigger than the saving made by slightly lower rates.

Piling on top of that is the governments new decision to means-test Winter Fuel Payments, that will leave all except usually those who claim Pension Credit missing out on a further £200 - £300.

While there's a strong argument for ending the universality of Winter Fuel payments, eligibility is being squeezed to too narrow a group. Those just above the thresholds will be hardest hit. I'm due to meet the Chancellor in a couple of weeks, and will then be urging her to look at methods to widen eligibility – such as to homes in council tax bands A to D – an imperfect but workable proxy for lower household incomes.

People can and should save by switching: The cheapest year-long fixes on the market right now are about 7% LESS than the new October price cap, but they mightn’t be around long, That looks a good deal, as its currently predicted once rates go up they won’t come down. Don’t just jump on any fix though, if you’re going to lock-in you want to grab the cheapest for your use and location, so use a whole-of-market comparison, like MSE’s Cheap Energy Club, and find out who will let you fix for less.

Alternatively deals like E.on Next’s Pledge, or EDF Ensure are effectively discounted trackers, where they move with the price cap, but the unit rates or standing charges are guaranteed to be lower. And for more sophisticated energy users the Octopus Agile and Tracker tariffs where prices move rapidly can be far cheaper.

Consultation to reduce Standing Charges launched: The Standing Charge is a daily poll tax that means everyone with gas & electricity pays a minimum £338 a year even if they don’t use it. This moral hazard penalises lower users, often many who are vulnerable, and means they will face a proportionately larger rise.

I've long called for change, so welcome today's long promised consultation on reducing standing charges today - though I'm slightly disappointed even the maximum proposed reduction is only £100/yr - but I'll hold judgement until I've read the consultation in full.

Just a note on fixing, the confusion will be that actually grab a cheap fix now and you'll pay 2%ish more than current price cap - but crucially far less than the new Oct price cap (and where it's predicted to stay). Some saying "shouldn't I wait until Oct then?" but we don't know whether you'll be able to fix at these rates then. This is all explained via the MSE cheap energy club comparison where we included predicted future price cap in the comparison.