Martin Lewis says July energy bill rise is voluntary for most households

Martin Lewis says July energy bill rise is voluntary for most households

The energy price cap will rise in July, adding roughly £63 to a typical annual bill. But Martin Lewis, founder of MoneySavingExpert, says the increase is voluntary for most households. As the Liverpool Echo reports, Lewis says the rise is optional for anyone who switches to a fixed-rate tariff before July.

The catch is that most people are on standard variable tariffs and will automatically pay more. The Chronicle Live quotes Lewis: ‘For most people, the July rise is voluntary. If you fix now, you can beat it.’

What it costs a typical 3-bed semi

A typical 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity per year will see the price cap rise from £1,738 to £1,801 in July. That’s an extra £63 a year, or about £5.25 a month. However, fixed-rate tariffs currently available are up to £150 cheaper than the new cap, according to comparison sites. That means fixing now could save a household up to £213 a year compared to staying on the default tariff after July.

The savings are even bigger for homes with electric heating or older appliances. A household using 18,000 kWh of electricity could save £300 a year by fixing now.

Who qualifies, and who doesn’t

Lewis says the fix is available to anyone with a smart meter or a standard meter, and no exit fees on their current tariff. Most standard variable tariffs have no exit fees, so you can switch immediately. However, if you are on a fixed deal that ends soon, you may face an exit fee. Check your last bill or call your supplier. The best fixed deals are typically for 12 months, so you lock in the current rate until mid-2027.

But there is a catch: not all fixed deals are cheaper. Some are only slightly below the cap, and others are higher. You need to compare carefully. Lewis recommends using a comparison site that shows the total annual cost, not just the unit rate.

How to fix your tariff in 10 minutes

The process is straightforward. Go to a comparison site, enter your postcode and current usage, and compare fixed deals. Look for tariffs with no exit fees and a low standing charge. The best deals are from suppliers like Octopus Energy, EDF, and British Gas, but smaller suppliers often have lower rates. Once you choose, the switch takes 2-3 weeks and your supply is uninterrupted.

For households on prepayment meters, the process is similar but the savings are smaller. Prepayment tariffs are typically £15-£20 a year more expensive than direct debit, so the net saving from fixing is lower.

If you are on the Warm Home Discount or other benefits, check that the fixed tariff doesn’t affect your eligibility. Some suppliers exclude certain benefits from fixed deals.

What this means for your EPC and long-term savings

Fixing your tariff is a short-term fix. The long-term solution is to improve your home’s energy efficiency. A home with an EPC rating of C or above uses 20-30% less energy than a D-rated home, saving £300-£500 a year on bills. The Boiler Upgrade Scheme offers £7,500 off a heat pump, and ECO4 grants cover insulation and heating upgrades for low-income households. The Home Upgrade Grant (HUG2) is available for off-gas homes.

Combining a fixed tariff with an EPC upgrade could cut your annual energy bill by £500-£800. For a typical 3-bed semi, that’s a 30-40% reduction.

Next steps for homeowners

1. Check your current tariff and exit fees. If you are on a standard variable tariff, switch to a fixed deal now. 2. Use a comparison site to find the best fixed tariff for your usage. 3. If you are on benefits, check eligibility for ECO4 or the Warm Home Discount. 4. Consider an EPC assessment to identify insulation and heating upgrades. 5. Apply for the Boiler Upgrade Scheme if you are replacing a gas boiler.

The July price cap rise is coming, but you can avoid it. Act now to lock in lower rates for the next 12 months.