Martin Lewis explains 3 things to do before the energy price cap rises on Friday
MoneySavingExpert, Martin Lewis, has explained three things to do before Ofgem increases its price cap by 54% on Friday (1 April).
Anyone on a default tariff who pays direct debit - the cap will increase by £693, from £1,277 to £1,971.
Prepayment customers will see a higher jump, with their cap price increasing by £708, from £1,309 to £2,017.
Martin Lewis has explained three things to know and do now.
Take a meter reading on 31 March
By taking a meter reading, you can supply your energy provider with the information on how much gas and electricity you used before the cap increase.
By doing this, you're informing your energy provider that all your energy usage before 1 April should be charged at the current rate - before the price cap increases.
Martin said: "You are drawing a line in the sand that says to them: all the energy I have used until this point should be charged at the cheap rate"
"Do not estimate my usage, I am locking it down so you cannot charge me any more than the amount I've actually used from 1 April onwards."
To send a meter reading, send the first five numbers shown from left to right (you can ignore any red numbers) to your energy supplier.
You should be able to do this over the phone, online or through an app.
Stay on direct debit
The financial guru has warned against any households thinking about ditching their direct debits, as this may end up costing you more.
Martin explained this is to do with how the price cap is calculated: "If you're on typical usage, the price cap from 1 April - for somebody paying by direct debit - is £1,971 a year"
"If you want to pay by quarterly bills, and that's what most people ditching direct debit tell me they're thinking of doing, then the price cap is £2,100.
"So that means you're paying over 6% more for the same usage than you do by direct debit because there is a discount allowed for direct debit."
Avoid fixed deals
Analysts at Cornwall Insight analysts predict the price cap will rise to around £2,500 a year for somebody on typical use from six months' time on 1 October.
But locking into a deal to avoid another hike is not worth it.
Martin says the cheapest open market deal at the moment is around 40% more than the April price cap, so for many homes, the best thing is to remain on the price cap.
However, if the price cap does rise to the predicted level, then Martin explained you'd require a fixed deal no more than around 18% to 20% above the April price cap for it to be worth fixing right now.
He said: "it is not worth fixing. You're better off to stay on the April price cap and then if nothing changes before that, go on to the new October price cap"
"Again, this is my best guess, I do not have certainty or surety here - it is a bit of crystal ball gazing.
"But if you haven't got a cheap fix so far, I would stick where you are, cross your fingers that wholesale prices come down, which means cheaper fixes will be available in the future, and if not, stick with the price cap."