MARTIN Lewis has answered two of the most common energy bill questions ahead of huge price hikes this week.
The MoneySavingExpert revealed whether you should get a fixed deal and why standing charge prices are soaring.
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Millions of households face paying an extra £693 a year when the energy price cap jumps on Friday.
It will rise to £1,971 a year, but that is the figure for average energy use so you could end up paying more.
The cost of living crisis is putting pressure on family finances, with food prices and tax bills also set to soar.
Martin Lewis answered two important questions on a cost of living special for ITV’s Good Morning Britain this morning.
Should I switch to a fixed energy deal?
Fixed deals used to be the cheapest way to pay for energy costs.
But with wholesale gas prices at record highs, suppliers are charging more for those deals than usual.
That means for most people, staying on their firm’s standard variable tariff is the best idea as its protected by the price cap.
Martin answered a viewer’s question about whether they should fix now before prices rise even higher.
The price cap is reviewed twice a year with the next hike due in October.
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The personal finance guru said the October price cap is predicted to be around £2,460 a year – down from previous forecasts of £3,000.
However, that figure has not yet been confirmed.
“There is no point fixing unless the deal is cheaper than that, he said.
“The cheapest fix right now on the market is £2,880,” Martin said.
“That is actually more than the prediction of the October price cap. So it isn’t worth getting a fix today. Stick on the price cap.”
He added that there are no cheaper fixes on the open market, but your supplier could offer you a better deal.
Check your online account regularly to see if they offer you a cheaper price.
But you shouldn’t sign up unless it’s up to 20% higher that the £1,971 April price cap.
That would give you a limit of £2,365.
Why is the standing charge going up so much?
The second most asked question is about standing charge increases, Martin said.
The amount you pay for energy is split between the cost of the gas and electricity use, and the standing charge.
A standing charge is added to most gas and electricity bills to cover the cost of supplying your home with energy.
It’s a fixed daily amount that is unaffected by how much energy you actually use.
Ofgem, the energy regulator, has said that suppliers can set their own standing charge and tariff rates, as long as bills don’t exceed the average total amount.
The price cap daily standing charge is rising from 25p to 45p for electricity and from 26p to 27p a day for gas on average.
But the amount you can be charged varies across the country.
Martin answered a question from a viewer asking why their standing charge is rising so much.
“This is literally the single biggest question I get after ‘should I fix?’,” he said.
He explained that the standing charge has risen to cover the increase in fixed costs that suppliers have to pay.
That includes the cost of taking on new customers when other suppliers have gone bust.
More than 30 energy firms have collapsed since the beginning of last year.
“The reason is because of all those firms that have gone bust and their customers have moved to suppliers of last resort,” Martin said.
“Those suppliers didn’t want to take those customers so they had to be paid to take the customers.
“You’ve also got transmission costs and the green levy has gone up.”
The standing charge for electricity is rising more than for gas as more people have electricity.
You can’t reduce your standing charge, but different suppliers will charge different amounts.
This morning, Martin also revealed how households can get the £150 council tax rebate and urged workers to do a tax check before major changes next week.
In an interview with deputy Prime Minister Dominic Raab, Martin urged the government to provide more help to “desperate” families.
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