Mark founded MoneyMaxim in 2008, with the aim of delivering an impartial and independent service. Mark is a regular money saving expert in the press and writes regular news and articles for the MoneyMaxim news pages sharing his views on banking, personal insurance and the utilities (gas, electricity, mobile and home phones, broadband and pay TV) market with customers.
It looks very much as if energy prices are on the increase - again.
Wholesale prices for gas have sky rocketed over the past few months - and this is likely to mean that OFGEM, the energy market regulator, will announce in August another increase in the energy price cap.
In April the cap increased prices for the average household by £96 p.a. - and the likelihood is that a similar, or even bigger, rise is on its way next month - one that would come into effect in October, just as the nights get longer and temperatures start to drop.
Over the past 12 months the cost of the cheapest fixed price contract has increased by £200, and given the price that energy companies are currently having to pay for fuel normally one would have expected prices to have increased already. However because of the cap the big energy companies such as British Gas, EDF, Scottish Power, EOn or N.Power are unable to push prices higher as they are already hitting the price cap.
They will be lobbying OFGEM hard to increase the cap - and we should expect to see them all move prices upwards at the first opportunity. Industry experts are suggesting that the new cap will be around £1250 - up from the current £1138.
So what can you do now to protect yourself against higher prices this winter. It will depend on your current situation.
Normally you would see massive savings by taking up a fixed priced contract over the current standard prices. These look more modest today - but that's because the savings will really not be seen until the new higher price cap comes into force and those on variable rates see prices increase significantly. Early this month one of the price leaders Igloo Energy pushed prices up by a massive 12%. So although the saving look modest today you are almost certain still ton save significantly over the next year.
If you get notification that you are approaching the end of your contract compare prices immediately - the next cap will be announced on the 7th August - and fixed prices are likely to move up almost as soon as that announcement is made.
If your current arrangement comes to an end in the Autumn its more debatable - especially as you may well have to pay an exit fee. However, run a quote, see your options, and potentially call your current supplier to see if they can move you to a new contract with a longer expiry date to give you price certainty through the winter. That way you may avoid paying the exit fee.
Well done! You are probably best placed to try to ride out the winter on a contract that is appreciably cheaper than those on the market today. Whilst you are welcome to check the situation its unlikely that you will make any saving - certainly for the remainder of this year.
Hopefully by taking action now you can protect yourselves against a winter of expensive energy bills.