Pod Insights The Martin Lewis Podcast Bonus Mini-Pod: Energy Price Cap rise About this episode The energy regulator Ofgem has announced its next quarterly price cap will rise by £21 for the average household. An increase of £1.75 a month.
The decision affects the bills of 27 million households in England, Wales and Scotland.
In this bonus episode of The Martin Lewis Podcast, Martin explains what it could mean for you.
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Speaker 00 This BBC podcast is supported by ads outside the UK.
0:05 Speaker 01 Hosts Thanksgiving with industry-leading quality standards from Whole Foods Market. There are no antibiotics in their meat department, ever, so carve up turkey and spiral-cut ham with peace of mind. Shop organic sides like stuffing mix and cranberry sauce from 365 brand. And guess what? All their delectable pies are made with no high-fructose corn syrup. Gourmet Thanksgiving flavours with the quality you want, only at Whole Foods Market.
0:39 Speaker 02 Welcome to The Haunted Library. Join me, Colin Morgan, as I read Frankenstein by Mary Shelley. A story of science and ambition, loneliness and longing, and what it truly means to be human.
0:59 Speaker 02 Listen to The Haunted Library wherever you get your podcasts, or find us on YouTube.
1:08 Speaker 03 BBC Sounds, music, radio, podcasts.
1:29 Martin Lewis? Hello and welcome to this special, urgent edition of the Martin Lewis podcast on the back of today's news that the energy price cap is to rise again in January. So what does this mean for you? What should you do about it? 括弧 spoiler alert, you should fix. And the big question I keep being asked is all about will standing charges come down? I answered all of those in my interview on Five Live Breakfast this morning, so have a listen.
1:56 Speaker 05 As we've been hearing, the energy price cap has gone up with bills for a typical household, rising by £21 a year in January. Money saving expert Martin Lewis is here. Morning, Martin.
2:06 Martin Lewis? Good morning. Hello. I'm never a fan of that typical bills thing. You'll remember that.
2:10 Speaker 05 No, exactly. So let's not do that. Let's talk about it in meaningful terms to people. How would you put it?
2:18 Martin Lewis? Ofgem's price cap is rising 1.2% on the 1st of January, on the top of the 10% rise we've already had. So for every £100 you're paying for energy now, you will pay £101.20 on average from the 1st of January. And what's really important for people to understand are the current predictions are, because the price cap moves every three months, it will rise again by a couple of per cent on the 1st of April, drop slightly in July, drop slightly again in October. But if you look across the next 12 months, that means it is predicted, even after it's dropped twice next October, it will still be more than it is now. So over the next year, if the predictions followers were expecting,
2:59 Martin Lewis? you will be paying more than you do right now for energy. And right now is 10% higher than it was before the 1st of October. Now, the way that the price cap is actually being increased this time, the standing charges are staying flat, the unit rates are going up. So remember, the energy price cap isn't a cap on the total amount you pay, it's a cap on the amount that energy firms on their standard rates, which is pretty much all those that aren't fixed or special tariffs, can charge you for the daily charge and for the unit cost of electricity and gas. So here are the new charges. The standing charge for electricity will remain on average, direct debit, 61p a day. The unit rate will go up
3:38 Martin Lewis? 1.5% to 24.9p per kilowatt hour. For gas, the standing charge will remain at 31.7p per day. The unit rate will go up by 1.6% to 6.3p per kilowatt hour. Though I need to strongly say that it does vary by region and payment method. Those are the UK averages.
3:58 Speaker 05 Well, we were just talking to Sandra, 67, lives alone, has got her heating on now because obviously it's near zero, but she's going to switch it off and not put it on until the end of the day. And it doesn't qualify for winter fuel payments. She's kind of over the limit for that. So there's so many people listening to you.
4:15 Martin Lewis? Over the very low limit for that, yes.
4:16 Speaker 05 Yeah, exactly. Very low limit. So there's so many people listening to you. So what can we do? And let's talk first of all about the cap. You're not a fan of it, are you? Why?
4:25 Martin Lewis? Well, listen, first of all, the most recent change that we had, big change to the cap, was it used to be every six months, it's now every three months. So now we get this winter change, right? So we have this sort of mid-winter annual period where I have to come on the radio and the television elsewhere and tell people their energy bills are going to go up. It's not particularly good psychology. We could have kept it on six months. I also think the problem that we have now with the cap, and let's be straight, this affects 80% of homes in England, Scotland and Wales, there's no cap in Northern Ireland, it's on a different system, who are on standard tariffs. Now, people aren't sure they're on standard tariffs. Genuinely, if you're not sure you're on a standard tariff, you're almost certainly on a standard tariff, because it means you don't know what tariff you're on. And if you don't know what tariff you're on, you're almost certainly on a standard
5:09 Martin Lewis? tariff, which means your tariff is price capped. It's only those who are on a fix or have deliberately chosen an active special tariff who aren't. Now, the problem I have with it is it was brought in to be a backstop for the people who never switched to guarantee them they would not pay too much. That was before the energy crisis. What it has become now is effectively regulated prices across the country for the majority of people, where offgem sets the price and energy firms put their tariffs at that price. It's called a cap, but very, very few companies charge anything other than the maximum cap. So it's really an offset fixed price. You ask me what people can do about it? Well, this is
5:53 Martin Lewis? the important bit. As I've just said, the price cap is going at 1.2% on the 1st of January, and it is predicted to stay higher than it is right now, right across 2025. But if you look, what are the cheapest fixes available right now, where you can lock in at a rate, they are 5% less than you are currently paying.
6:19 Martin Lewis? So almost everyone, apart from those on non-smart prepayment tariffs, almost everybody can lock in 5% cheaper than the current rate and get the peace of mind guarantee that you will not pay more over the next year. And that is the no-brainer thing to do right now. The savings aren't huge, but at least you know it won't go up. You know what it's going to pay and you will pay less than right now. So I strongly suggest people go onto a whole of market by default comparison site, of which there is only one mainstream one, which unsurprisingly is MoneySavingExpert.com. What whole of market by default means is not hiding the tariffs that don't pay you when you first go onto the comparison site and find your cheapest deal.
7:03 Martin Lewis? Because who your cheapest fixes depends on where you live and what you use. But we do have a real problem that the price cap post-energy crisis has become such a default that there's only flaccid competition out there. You can save 5% by fixing. You used to be able to save 20% by fixing. And we really need the regulator to get hold of the lack of competition that's in the market.
7:26 Speaker 05 What should they do then? Because I didn't know that and that is so interesting, isn't it? It's a bit like a speed limit, isn't it? You don't have to drive to it, but most people do. And if you're in the business of making money out of energy, that is precisely what you will do. So what should they do? Because it's interesting, isn't it? Because very often, you know, you need to gather information out of them. And it's brilliant that you do that. But you wonder whether people are, you know, do they actually see that enough? Do they hear it enough? Do they, should it be on their, their energy company to say, look, this is what we're charging you, but of course also you could get this cheaper. You know, should that be put out there?
8:01 Martin Lewis? Well, energy companies do do it and they advertise, of course, their own, their own fixes. They don't advertise the cheapest on the market. But this has also got very difficult because one of the things that we now have is when you look at a price over the next year, what price should you be quoted as the benchmark that you are comparing to? So right now, if I gave you a price, would you want me to do it based on the current October to the 1st of January price, the new 1st of January to April price, the predicted price over the next year? So as you can see, this is what, and so we had a period when the energy price cap was dropping, what energy firms
8:44 Martin Lewis? would do is they would compare it to, they would compare the fix they were offering to the existing price, even when you were one week away from the price cap dropping by 10%. So it would look like you would save by fixing, but actually you wouldn't save by fixing, you'd be better on the price cap. And there's such mass confusion there now. Yeah, that's not good, is it? And of course, my entire job is trying to come to explain through that, which is why, instead of talking about typical rates, which is meaningless because nobody pays the typical rate, I talk in percentages. So I talk about going up, going down, but over the next year, to try and paint this picture for people that if the predictions are right, and of course they are predictions and predictions will change, but if the predictions are right, you will pay more, therefore you need to know, instead of me sitting here, which I
9:26 Martin Lewis? could do and say, on average over the next year, you'll pay 1.7% more if the predictions are right, it's just meaningless. So I'll just say you'll pay more, but you could pay less and guarantee that you'll pay less, and simplify it in that way. And I need to say, the biggest issue, and if you forgive me, I'm going to pivot slightly, the biggest question I get is about standing charges. This energy pole tax, this £300 a year that you pay just for having the facility of having gas and electricity, it's a moral hazard. It means those people on the lowest bills can't save money by cutting back, and many older people who have gas central heating but only turn it on in the winter, still have to pay a daily charge in the summer even though they're not using it. Now, I
10:11 Martin Lewis? have long campaigned that we need to reduce the standing charge. We need to be honest, what Ofgem would do in that case is it would lower the daily charge and it would increase the unit rate that you pay for each unit of gas and electricity. Many people were expecting to see the result, the announcement on the back of the consultation on standing charges in this. Announcement today for the January price cap, it isn't there. My view, and I shall be careful what I say, my view is we will hear about that in the next two or three weeks, but I need to open out with a level of pessimism. I have always said the only way that you can reduce the standing charge, because it's
10:53 Martin Lewis? going to increase the unit rate, is if off gem works in concert with government and government increases special measures for vulnerable high users, such as those people who have dialysis machines or electric wheelchairs that need charging, so they use a lot of electricity, because otherwise you can't put the unit rate up without protecting those people. We need the standing charge down for everyone because it's unfair, but there's this small cohort of people with disabilities and illnesses that we need to protect to a vulnerable. Government has not done that. That protection isn't in place, therefore I am not expecting to see off gem reduce the standing charge as it was looking at in the consultation.
11:33 Martin Lewis? My hope now is they'll follow my proposal, which is to have a dual price cap in future. So you have one price cap that's low standing charge and high unit rate, and one price cap that's high standing charge and low unit rate, and you by default move vulnerable people to the right one. But if people are expecting, I mean, my social media is swamped with questions about the standing charge day. If people are expecting the standing charge to come down, I am now much more pessimistic that that will happen in the absolute than I was before. That's it for this special mini edition of the Martin Lewis podcast. I do hope you found it useful. We'll be back with the normal podcast next week, so if you've got any questions on energy bills, get in touch via [email protected] .
12:16 Martin Lewis? Plus, next week, don't tell anyone, just between us, we've got a special podcast out all about how to fight back on the scams epidemic. If you're not subscribed to get this podcast each week, why not? Go press the subscribe button on BBC Sounds now. Bye bye.
12:31 Speaker 06 Martin Lewis is the founder of moneysavingexpert.com. But of course, other consumer and price comparison websites are available. You can get in touch with Martin's podcast team by emailing [email protected] . The offers and rates mentioned in the podcast are correct at the time of recording. However, if you're listening on demand, it's worth double checking as the details can date.
13:02 Speaker 03 BBC Sounds Music, Radio, Podcasts
13:12 Speaker 02 Welcome to The Haunted Library.
13:16 Speaker 02 Join me, Colin Morgan, as I read Frankenstein by Mary Shelley. A story of science and ambition, loneliness and longing, and what it truly means to be human.
13:32 Speaker 02 Listen to The Haunted Library wherever you get your podcasts, or find us on YouTube.
Previous Savings Q&A – boost what you get | Is Black Friday a dud? | Acts of Financial Kindness | Energy Price Cap news Next The Scams Epidemic: A Martin Lewis Podcast Special Page updated November 6, 2026 · transcript and summary are machine-generated