Pod Insights The Martin Lewis Podcast Energy Question Time: Is it time to fix? (spoiler: YES!) How do I get my credit back? Are Smart Meters… not? About this episode With the energy price cap rising 2%, and predicted to remain high for the next year, Martin Lewis answers your questions on how you can save £100s a year on home energy bills. Including new low standing charges tariffs, smart meter issues, why fixing now works and loads more...
Send in your questions for future Question Time podcasts by emailing [email protected] mailto:[email protected] .
Transcript 8,637 words · 12 speakers
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.
0:06 Speaker 01 Cheers to fall savings at Whole Foods Market, home of higher ingredient standards. This Halloween, share chocolates and candies made without that spooky high fructose corn syrup. Throwing a party? Make it easy with a berry chantilly cake. Ready to cook pizza? No antibiotics ever chicken wings. And sushi made fresh daily. Fall gatherings never tasted better. Save through November 3rd at Whole Foods Market.
0:33 Speaker 00 Sometimes we all need an extra helping hand, especially with a tricky business problem you've been putting off. Claude is the AI for just that. It's the collaborator that understands your entire workflow and thinks with you, not for you. And Claude isn't just for quick questions. Hand it a whole task, like turning a folder of scattered notes into a report, and it does the work and hands back something finished that you can open and edit. Claude can now draft a doc or deck right in front of you, and Claude Design now lives right inside Claude. Describe the website or prototype you're picturing, attach your design system, and it comes back in your own design language, ready to edit right on the canvas. It works with your files and the tools you already use, like Gmail and
1:18 Speaker 00 Slack. And whether you're debugging code at midnight, building a financial model, or strategizing your next business move, Claude extends your thinking to tackle the problems that matter. For problems worth solving, get started with Claude at claude.ai/solve. That's claude.ai/solve. And check out Claude Pro, which includes access to all of the features mentioned in today's episode. claude.ai/solve.
1:45 Martin Lewis? Hello and welcome to the cunningly named The Martin Lewis Podcast. I do wonder what that's going to be about. And this is an energy question time special, in which I answer your questions about absolutely anything you want, as long as it's about home energy bills. And we're doing this as the energy price cap that dictates the bills two thirds of homes in England, Scotland and Wales pay has just gone up by 2% and it's predicted to stay high for the next year. In this week's Question Time, I'll try and answer your questions on: Should I fix? Spoiler: yes. Get off the pants cap. Why are so many smart meters broken? Should I claim back my energy credit?
2:28 Martin Lewis? I've got £1,000, that seems far too large. I'm a low energy user. Should I wait to do anything until January because the new low standing charge tariffs come in then? Are there special tariffs where solar panel users can save? Spoiler: yes. Can you fix if you're on a prepayment meter? Spoiler: yes, some can. And loads more. Play the theme tune.
3:07 Martin Lewis? Now, as this is a Question Time special, it's not me who dictates what's coming in, it's he who must be obeyed, podcast producer Matt. Have you had a good week, Matt?
3:14 Speaker 03 I have, I've been in Portugal.
3:16 Martin Lewis? Oh, very nice. For pleasure or for work?
3:19 Speaker 03 Just for pleasure, just for a bit of sun.
3:21 Martin Lewis? Are you all tanned? We're not in the same place, I can't see you.
3:23 Speaker 03 I don't really tan. I have caught the sun slightly, let's say that.
3:27 Martin Lewis? Okay, and of course, the sun is something that helps warm our homes, but it's not the only thing that helps warm our homes. I mean, brilliant, professional broadcasting at its best. Shall we just get on with the questions?
3:39 Speaker 03 Let's do it.
3:41 Martin Lewis? Right, Martin, first caller I've got for you. Gavin is in Kidderminster. Hi Gavin.
3:46 Speaker 04 Hi.
3:47 Martin Lewis? Good morning Gavin, what's your question?
3:48 Speaker 04 Yeah, well, I'm just about to come off a fixed rate in a couple of weeks on my energy bill and I don't know really what the best thing to do, whether it's to go on another fixed or not, so yeah, that was my question.
4:02 Martin Lewis? Short answer or long answer?
4:04 Speaker 04 The best answer.
4:05 Martin Lewis? Short answer, yes, of course, go on another fix. The long answer, strap yourselves in everybody, because this is what I'm going to use to explain the big picture at the moment.
4:16 Martin Lewis? Tariffs fall into two categories, two big categories at the high level. You're either on a price cap tariff or you're not. So, those people who have never switched, you are on a price cap tariff. Those people who are on a fix or who are on a special deal, you are not on a price cap tariff. But if you are on a fix, like Gavin here, once your fix ends, if you do nothing, you are automatically moved on to a price cap tariff. So what is a price cap tariff? Very simple, it is your company's default standard tariff and the amount that they can charge on the standing charges, the daily charge you pay each day for having the facility
4:57 Martin Lewis? of gas and electricity, and the unit rate, how much you pay for each unit of gas and electricity that you use, is set, there is a set maximum under the price cap. It's actually regionalised and based on the way that you pay, but there is a set maximum. That is what has just gone up. I'm recording this on the Wednesday, it's gone up 2% today because the price cap changes every three months. So Gavin, if you do nothing, you will be on the price cap. The price cap, putting it plainly, is a pants cap. You are, it is, was originally set up as a default backstop for the people who do not engage in the switching process.
5:38 Martin Lewis? The problem we have now, since the energy crisis, is it has become a default tariff for many people. Two thirds of homes in England, Scotland and Wales are on the price cap tariff. Originally, it was only ever thought it'd be about 20%, you know, the people who didn't ever engage in the switching market. It's way too many people and people need to get off it. So if we just go through what's happening right now, the price cap is going up about 2% now. We are already nearly halfway through the assessment period for the new price cap in January. And when you factor all that in, that is roughly predicted to stay where it is right now. It's not going to move very much. I mean, they're predicting it's going down half a percent,
6:23 Martin Lewis? but let's ignore that. It's going to stay roughly where it is on the October price cap. So that's a pretty sure prediction. It would take a monumental move in the underlying wholesale rates, the gas and electricity rates that energy retailers pay in order for that price cap in January to be a long way away from the October price cap. So we now know roughly where the price cap is going to be until the end of March, and it's going to be high, and that's the high use winter period. Currently, the predictions are afterwards it's going to get even higher, but that's much more crystal ball gazing. So what we have to do is compare that to the cheapest fix on the market, and this is the no-brainer fact. Cheapest fix on the market is roughly, and it does depend where you live and how much
7:04 Martin Lewis? you use, et cetera, et cetera, 15% cheaper than the October price cap. 15% for someone with typical bills that's getting on for £300 a year less. So we know the rate of the price cap now until the end of March, and we know what you can fix at, which is 15% cheaper. And now until the end of March is when you do the bulk of your energy usage over the year. So this is the point that being on the cheapest tariff really matters, and a fix is 15% cheaper and the rates are guaranteed for a year. And the vast likelihood, based on current predictions, is that there is no chance of the price cap unless there's some monumental worldwide economic collapse or some other unknown, unknown economic factor
7:47 Martin Lewis? that's going to bring the price cap down to the level of the cheapest fix within the next year. And if it were to come down, even then you'd be better off fixing because it would have to come down so substantially after the end of March to make up for the savings that you've had until March, that a fix is an absolute no question, no-brainer for virtually everyone. And the only people it isn't better for is those for whom there are other specialist tariffs like time of use tariffs or EV tariffs that may be better. So I gave you the short answer. The long answer is still the same. Basically, go onto a whole of market by default comparison site, find your cheapest fix, and get off that price cap as quickly as you possibly can. I almost called it a price something else
8:32 Martin Lewis? that almost sounds like cap with an R in it. And to be honest, I always use the phrase pants cap. I wish I could call it the price. The other word, but I think I probably couldn't do that in the pod.
8:42 Speaker 03 No, and I'd tell you off for it as well.
8:43 Martin Lewis? And Prudential would tell me off. And does that make sense, mate?
8:46 Speaker 04 No, it does. That's great. Lovely.
8:48 Martin Lewis? Thank you, buddy.
8:48 Speaker 03 Cheers, Gavin. Bye bye.
8:52 Speaker 03 Okay, question from Adatoro. Any advice for prepaid users? I moved into a new place last year that had a prepaid meter. So far, I love it as I feel in control. Do you have any advice on switching? I can't seem to find anything worth doing on the comparison site or my energy club.
9:11 Martin Lewis? Okay, so there are virtually never cheap tariffs available for old school prepayment meters, key or card meters. But there are cheaper tariffs available if you are on a smart prepayment meter. I would also say that, you know, whether you get a smart meter or not, there's lots of debate. Where it is really important and where smart meters really come into their own is for those on prepayment. Smart prepayment meters that allow you to top up much more easily, that allow the energy firm to help you if you're having problems much more easily, really are a massive step up from old school prepayment meters. And there are sometimes, nowhere near as many as for direct debit, but there are sometimes, and there are right now,
9:53 Martin Lewis? some decent fixes available for those on smart prepayment meters. So the answer to your question is, if you're on a key and card meter, there's very little choice. If you move to a smart prepayment meter, then there's much more choice and I think it's more effective. And it is worth noting, bizarrely, these days, if you're on the price cap, then prepayment meters are actually cheaper than direct debit.
10:22 Martin Lewis? Roughly two or three percent cheaper. So while you are disadvantaged by the lack of competition and much cheaper prices, at least within the price cap mechanism, you're actually paying less than those on monthly direct debit.
10:36 Martin Lewis? Next, we have Amanda, another caller. Hi Amanda.
10:40 Speaker 05 Hi.
10:41 Martin Lewis? Hello Amanda, what is your question please? Or do you know what, doing that, I found like I was a proper DJ now. I quite like that, not being in... Hello Amanda, and what's your question?
10:53 Speaker 05 So, I'm a low energy user and standing charge is about 60% of my bill in winter, and in summer, and about 25 to 30% of my bill in winter. So I'm wondering if it's worth fixing now or waiting to see if the changes to standing charge rules will make my bill a bit lower in the future?
11:15 Martin Lewis? So I think the changes to standing charge rules will make your bill a bit lower. So for those people who don't know, the regulator OFGEM has announced that from January, all firms must offer a switchable tariff with lower standing charges, not no standing charges. Now, what will happen is they will take some of the costs out of the standing charge and they will add it on to the unit rate. It will be, if we're lucky, a zero-sum game. I say if we're lucky because I think it should have been in the price cap, so therefore they would have only been able to take off the costs on the standing charge and add them to the unit rate. But as it's not a regulated tariff, they could actually put the unit rate up disproportionately to what they're saving on the standing charge. I also think it's a massive missed opportunity because I would have done it within the price
11:58 Martin Lewis? cap and then all the vulnerable people who would never switch to this, who are lower users, could have been automatically switched by default. And I'm quite frustrated because this is based on my original suggestion, that they have smothered it in a pillow of bureaucracy. But I will try and clench my buttocks and not talk about that and give you some practical information instead. So, just give me a hand so I can get a caption. What are you roughly paying each month in total for your energy bills?
12:22 Speaker 05 About £90.
12:23 Martin Lewis? £90?
12:24 Speaker 05 Yeah.
12:25 Martin Lewis? So yeah, my general guess is people who are paying under around £1,200 a year will be better on these new lower standing charge tariffs because the saving on the standing charge will not be disappeared by the increased cost on the unit rate. But it will be relatively fine. Now, what we have to do is contrast that by the saving from a cheap fix.
12:53 Martin Lewis? And we're talking about the end of January, so where are we now? We've got October, November, December, January. You've got four months of the high use period.
13:03 Martin Lewis? Where
13:05 Martin Lewis? and and remember, cheap fixes often have lower standing charges as well, because that's how it is all incorporated. Here's what I would do. I and and you'll have to forgive me, this is a guesstimate because those tariffs aren't published. Go on to a comparison.
13:19 Speaker 05 Mm hmm.
13:19 Martin Lewis? And find out how much the cheapest fix is going to save you.
13:24 Speaker 05 Okay.
13:24 Martin Lewis? Right. If it's saving you over, my guess would be around, and forgive me for guessing, but it's all I can do. If it's saving you over ten, twelve percent.
13:33 Speaker 05 Mm hmm.
13:34 Martin Lewis? Compared to what you're paying now.
13:37 Speaker 05 Yeah.
13:37 Martin Lewis? I would probably go on the cheap fix because it, this is the crucial period.
13:43 Speaker 05 Yeah.
13:44 Martin Lewis? Right, because this is when you're going to use most.
13:47 Speaker 05 Yeah.
13:48 Martin Lewis? And then, and then the fact is that you might be paying more than you would have after January. Because you're still going to be on a relatively cheap tariff, I think will probably. You will have still saved more and you won't be paying that much more then, so it would probably add up. That would be my instinct. The one other option you could do that you might find better.
14:08 Speaker 05 Yeah.
14:08 Martin Lewis? It is, there's a, there's a tariff called the E D F tracker tariff.
14:13 Speaker 05 Okay.
14:13 Martin Lewis? Now, that is basically a price cap.
14:16 Speaker 05 Mm hmm.
14:17 Martin Lewis? But fifty pound a year lower standing charges, just a set discount. You know, instead of the three hundred and twenty quid, depending on your payment method, you're two hundred and seventy quid. But the unit rates are exactly the same. So if you wanted to get a lower standing charge tariff now, that is an option for you. The E D F tracker tariff. There are other trackers, but they lower the unit rate. And and that's, that's a halfway house, that there's no right answer.
14:41 Speaker 05 Okay.
14:42 Martin Lewis? Does that make sense? Do you understand my logic?
14:43 Speaker 05 Yeah, it makes sense. Yeah, just my supplier had offered me a fixed. Deal that was not really any different to the current price cap.
14:53 Martin Lewis? No, well, that can happen. It's a cheap fix you need, not, not a normal fix. That's why you need to go on a whole of market comparison site and find out. But I can't guarantee at your level of usage, the saving will be that big because it depends on the interrelation between the standing charge and the unit rate. But when you go on a comparison, that is all factored in.
15:10 Speaker 05 Okay, I'll try that. Thank you very much.
15:12 Martin Lewis? All right, I hope that helps.
15:14 Speaker 05 It does. Thank you.
15:17 Martin Lewis? We've got Ray, he's in Newcastle and Delight, hello Ray.
15:20 Speaker 06 Hello Martin.
15:21 Martin Lewis? Hiya Ray, how you doing mate, what can I do for you?
15:24 Speaker 06 Uh, right, it's a bit of a two-part question actually.
15:26 Martin Lewis? Oh greedy, bog off, bog off question, go on.
15:30 Speaker 06 Yeah, uh, as a pensioner with the sort of modest energy uses, the vast majority of my bill is taken up with the standing charge. I feel as though, uh, people who are careful over the usage are sort of being used to subsidise the others. Um, if, if the standing charge was scrapped and the cost transferred to the unit price, uh, then, uh, the more you use, the more you'd actually pay for the service, which sort of seems more, uh, fair to me. I've heard a suggestion, uh, that, um, standing charges might be reduced a little, but this seems a bit of a halfway house, which might lead to overcompensated unit costs.
16:08 Martin Lewis? Okay, well, I, I've just been talking about that with a prior quarter actually, and, and you are absolutely right. Um, I have always had an issue with the standing charge. The standing charge has always been set up that for some reason, energy companies' fixed costs are putting the standing charge and their variable costs are put in the unit rate. Now, there are very few other businesses that work that way.
16:32 Speaker 06 Yeah.
16:33 Martin Lewis? You know, I, I use the example of a pub, although the pub industry is struggling at the moment. When I go into a pub, I don't have to pay a sort of subscription for being a member of the pub each month to cover the pub's fixed costs and the fixed costs that the brewery has and the fixed costs that the glass makers have, and then pay an extra fee on top for my pint. Uh, you, not that I drink a pint to be fair, but if I did drink a pint, and if I bought my pint, all the price and all the fixed cost is in the pint. So it seems to me fundamentally wrong, the way that we structure this and have some type of ideological doctrine that all of that price, all of the fixed cost has to be in the standing charge. Interestingly, and I will say this in one of my subtle ways.
17:13 Martin Lewis? My, I suspect that the government agrees with me. I'm going to say I suspect, and you'll just have to read what you think about that. I suspect that the government agrees with me. And Ofgem is, in the long term, looking at for two or three years' time, the entire structure of the way that our energy bills work. And I think quite a lot of the push of that would be saying, should we really be paying for everything that we're paying on the standing charge, on the standing charge, or should that be moved towards the unit rate? And certainly, if you are, if you're in the area of wanting people to use less energy, then the standing charge is a moral hazard. Because once you become a low user like you, then you're disincentivised from cutting your use any further because the savings just don't really add up. Because it's all in the standing charge anyway.
17:58 Martin Lewis? So all of that, I agree with you on. It isn't going to change in the short term. What's going to happen in the short term is there will be these new lower standing charge tariffs that come out in January, where the unit rate will go up commensurately. Or, as I've just explained, maybe more than commensurately, which is what I worry about because it's not in the price cap regulations. But you'll have heard me talking about that and you'll know that I'm pretty annoyed about the way that it's been brought in because I think it's killed what could have been the benefit of doing it under the price cap when it would have been regulated pricing and they couldn't have done it another way. Does that answer part one?
18:34 Speaker 06 It does, Martin, yes. And thank you for your help and concern on all of this. I'm sure there's millions of people who are, you know, thanked for what you do. The second part was, indicatively, my bill per month is about a hundred quid. And eighty pounds of that is standing charge. So, as you said earlier, I'm using very little but still paying quite a big amount percentage-wise. I'm fixed until December though with Octopus. And I just wondered whether I might be better sort of looking around now for an alternative deal or waiting until December.
19:12 Martin Lewis? So the problem is, you would have an early exit penalty if you left?
19:16 Speaker 06 Yeah.
19:18 Martin Lewis? But that early exit penalty ends, you can't be charged an early exit penalty within the last 49 days of your fix. So do you know the exact date that your fix ends?
19:29 Speaker 06 I don't have a hand, no.
19:30 Martin Lewis? Do you think it's early or late December?
19:32 Speaker 06 Um, I, I, I think it's probably about week three of December, something like that.
19:37 Martin Lewis? So we're talking for you the beginning of November.
19:41 Speaker 06 Yeah.
19:41 Martin Lewis? So that gives you two choices. The first of all is, I don't know if your, your fix that you've got is cheaper than the fixes available now. I suspect not actually, because there are some quite cheap fixes available now. So you have, there is one thing you could do now, which is you, Octopus is one of those firms that generally allows you to move to another fix within its own range without an early exit penalties.
20:05 Speaker 06 Yeah, yeah.
20:05 Martin Lewis? So you could re-fix with Octopus, but you could, and if you can find a fix with Octopus that's cheaper than your existing fix, then that might be worth doing now, because what the level that you'll be able to fix at at the beginning of November, when you're first free to fix, I mean, I simply don't know it's a crystal ball to do that.
20:23 Speaker 06 Yeah, yeah, yeah, I understand that. That's, that's great advice. Thank you. I'll, I'll try that with Octopus now and see what they're offering at the current time. And thank you for all your advice and your concern for us.
20:33 Martin Lewis? That's my pleasure, mate. I wish you, wish you all the best.
20:38 Speaker 03 Martin, just listening to that, I don't know if you'll be able to answer this, but it's quite similar. Um, at Beanie is asking, why is £20 a year added to everyone's bills to pay for energy, energy debt? Why is £15 a year added to everyone's bills to pay for the warm home discount? Surely I shouldn't have to contribute to either of these things? Why can't government look at marginal pricing? Keeps prices too high?
21:02 Martin Lewis? Well, first of all, don't call me Shirley.
21:03 Speaker 07 Can you fly this plane and land it? Surely you can't be serious? I am serious. And don't call me Shirley.
21:10 Martin Lewis? Sorry, old famfa.
21:11 Speaker 03 Terrible joke.
21:12 Martin Lewis? It's a very old, you're too young to not remember Airplane, the film.
21:15 Speaker 03 I've seen it, I've seen it.
21:16 Martin Lewis? It's not a terrible joke, it's a classic joke of the genre. And, but we shall move on and I shall answer the question. So look, energy debt is a problem and it has to be paid for. I mean, it's partly the energy crisis. Now, some of the energy debt is about firms that went bust. And actually, we are all protected by the supplier of last resort regime. And that is the guarantee that if your energy firm goes bust, you will have continuity of energy supply, your energy won't be cut off. You will be moved to a new company and your credit will be protected. So in a way, that's the cost for all of us to have that level of protection. There are also specific energy debt issues of people who during the energy crisis haven't been able to pay their bill.
22:00 Martin Lewis? Now, the same goes to that and the warm home discount, which is the warm home discount is a method of giving people, vulnerable people and people on low income some help towards their energy bills. And that is put on our energy bills too. You are absolutely right. Those are public policy issues that we need to address what's happening to energy debt. So the question is, who pays?
22:25 Martin Lewis? You could have it paid for by the taxpayer, in which case it would be increased taxation to pay for it, or you can have it paid for on the energy bill. It has been decided that as it is within the energy infrastructure, it is paid for on the energy bill. I mean, I have to be honest with you, those are relatively small amounts compared to most of what the standing charge is for. I mean, those two in total are less than 10% is what's going on. And you asked me why? That's why. A marginal pricing model, absolutely, you're right, as I've already talked about. You know, if we were to get rid of most of the standing charge and pay it on unit rates, then it would be people who use more energy, who pay more and contribute more towards those costs. And I think there's some fairness in that.
23:07 Martin Lewis? But at the same time, I would caution that I think we need to protect vulnerable high users too. You might be thinking, what's a vulnerable high user? Well, an older person in an inefficient house that is unable to increase the inefficiency of their house. Or someone who has two children in wheelchairs that need electric wheelchairs that need charging every day and use a huge amount of electricity because of that. Or someone who's got other medical equipment and oxygen tank sitting in their house that they need because of somebody who's got a disability. And those people can use a huge amount of energy. So while I absolutely am in favor of restructuring the system so that standing charges are lower and unit rates are higher, or preferably standing charges lower and unit rates aren't higher, that would be even better.
23:49 Martin Lewis? Then I think we do need to be mindful of the small number of vulnerable people who this would affect in a very negative way and we need to protect them too.
23:59 Martin Lewis? Now, well, this is a Home Energy Bills Question Time special. Most Mondays, we do a Question Time special where you can ask me anything you like within reason. So if you'd like to propose a question, whatever it is, any subject at all, then just email [email protected] and podcast producer Matt will filter them to his heart's content.
24:27 Speaker 03 Right, a question from Adam on solar panels. He's got solar panels and he's asking, should he be on a special contract and are there good contracts for solar? He's currently with British Gas for gas and electric and has been for the best part of 20 years.
24:40 Martin Lewis? Okay, this is quite complicated. Now, you're on an older system, so I'm presuming you are on a feed-in tariff system that lasted for people who got their solar panels installed until about April 2019. Afterwards, you'll be on a smart export guarantee. Now, with the feed-in tariff system, you are paid for generating energy even if you use it, and that is a locked-in rate for 20 to 25 years. It's a great rate and you get that whatever. But there's a second element that you're also paid, which is you are paid for energy you export to the grid. And that is the same as the smart export guarantee. They don't get paid for generating electricity, they just get paid for energy exported to
25:24 Martin Lewis? the grid and they get a saving on their energy bills for the energy that they use themselves. Even though you're on the feed-in tariff system, you can switch that bit, the bit where you're paid for energy exported to the grid, to a new provider while keeping the feed-in tariff payment, which you absolutely want to do. Whether you should or shouldn't depends. Now, there are actually four types or four categories, in my view, of smart export guarantee tariffs, which is where you're paid for the energy exported to the grid. The first type that pays the best is only for firms when you get your smart export guarantee with the firm who fits your solar panel. You've not done that, so that doesn't
26:05 Martin Lewis? count for you. The next type is only if you also have batteries, which you haven't mentioned. So that's not for you and they pay well. The next type, and the one that will pay you the most... Is if you get your energy and your solar export guarantee from the same firm and they're linked together. And that will pay you up to around 15 pence per kilowatt hour at current prices, and this does vary, it's not locked in, for the energy that you put into the grid. If you don't do that and you have a standalone tariff, which sounds like it's what you have at the moment, you'll be being paid somewhere more in the region of three or four p as opposed to 15 p.
26:43 Martin Lewis? So the question then becomes, hopefully you're following me, is it worth linking my energy provider to my smart export guaranteed tariff in order to get a higher smart export guaranteed tariff? Would the gain I made on my smart export guarantee outweigh the fact that I'm probably not going to be getting the cheapest energy deal on the market? So the answer, having crunched the numbers, loads of ifs and buts though, but just to give you a rough rule of thumb, is if you export more than 20% of the electricity you use, then you are probably, assume you've got decent sized solar panels, you are probably
27:24 Martin Lewis? better off linking your solar export guarantee tariff with your energy tariff. If you export less than 20% you use, in other words, you're using most of the electricity that you generate, then you should probably just find yourself the cheapest deal for energy. If you want to know, there are lists online, that's all I'm allowed to say, of what the different tariffs are available out there and where the best rates are. So you should be able to find that. I know that's complicated, but I hope it made sense. So right, Matt, what have you got for me?
28:00 Speaker 03 I've got you a question. This is from X at...
28:04 Martin Lewis? I knew it, to be honest, it's called question time. I knew it was a question. It was more, what is the question?
28:08 Speaker 03 How many smart meters actually work and are they accurate?
28:13 Martin Lewis? What a fascinating question. Government stats, 10% are faulty. My stats, 20% are faulty. The difference between the government stats and my stats is the government counts a faulty smart meter as one that is not sending meter readings back to the provider. My stats is basically done on a wide ranging survey, asking people, does your smart meter work? So it is a, it's a more intuitive feelings based one. Because for example, one of the things that you get with the smart meter is you get an in-house display that tells you how much energy you're using. Now, if your smart meter is working and sending meter readings to the provider, but your in-house smart meter isn't working, you would tend to say, my smart meter isn't working.
28:55 Martin Lewis? Also, if your meter is sending incorrect meter readings back to the provider, that would count under the government stats as working because they don't know that they're wrong, but you would say, my smart meter isn't working. So I would go, and I'm in fact trying to get the government to change the way it does its stats, to move more towards my basis, rather than its very narrow definition, I would say about 20% of smart meters don't work. The systemic problem with smart meters, and I need to be straight, this is hopefully going to change, the government has put a fix in, is for a long time, firms have been targeted on how many installations of smart meters they do. That even means if they were to install the smart meter in an area that had no signal,
29:37 Martin Lewis? so the smart meter could not send the feedback, that would count as an installation and they would be hitting their targets. And I consider that to be a perverse incentive, because what it's done, because there are only limited numbers of smart meters engineers, is because firms get fined if they don't install smart meters, they therefore put all their resources into installing new smart meters and they don't fix broken old smart meters, whereas clearly, when you're trying, and this is the government's priority, so I'm saying it in the abstract, the government wants more people to have smart meters, I mean, the main reason that they want more people to have smart meters is in a future of time of use tariffs, which require smart meters, if you could push more people to use electricity in off-peak times, you wouldn't
30:20 Martin Lewis? need as much redundancy in the generation system, because the peak usages of electricity would be lower, and therefore, the whole infrastructure would be cheaper and it would save us all money. So there's a sort of good reason going on in there. But the installation targets are a perverse incentive.
30:38 Martin Lewis? And so my view has been that we need to change those targets. Now, I spoke to the Secretary of State, Ed Miliband, on this in detail. He was receptive, to be fair, and said, you need to change the target. So it is the number of working smart meters. And you can hear by defining it as working smart meters, then you therefore get the companies are incentivized both to install new ones, but also to fix existing ones. They said that was impossible to do quickly, but they have instead, through offgem, just introduced quite rigorous targets for smart meter fixing of broken smart meters. It's not quite as harsh as the installation. I went through long discussions with them over whether this was enough. And I, in the end, am supportive of what they're doing, but have said, we will give
31:22 Martin Lewis? it a year to see if it will work as you think it does, which means we will get more broken smart meters fixed. And there will now also be penalties. So if your smart meter isn't fixed in time, then the firm will have to pay you a penalty. Whether the penalty is bigger enough to overcome the not installing enough smart meters penalty is the question. So I'm hoping, and I'm supportive of what the government's done. It's not what I asked it to do, but it has at least done something. And we're currently in that period where it's going to start bedding in and we'll see if it starts to work. Why this is all so important, and why this is so important for the government, is because if you're trying to encourage people to get smart meters, and all of your neighbours say, my smart meter doesn't work, don't do it, you don't get one.
32:04 Martin Lewis? And this is why I've argued to them, if you want to get more installs, now all the low-hanging fruit, all the people who want smart meters have got smart meters, then what you need to do is make sure that we fix all the broken smart meters.
32:19 Martin Lewis? Where are we moving to next, Matt?
32:21 Speaker 03 We shall move to a question from Martin.
32:24 Martin Lewis? Good name. Good name. I didn't send it in myself before anyone says.
32:29 Speaker 03 He's said, I'm hundreds of pounds in credit with British Gas. How can I claim it back off them?
32:36 Martin Lewis? Well, the first thing is, I get to talk about one of my favourite things in the entire world now. This is seriously sexy broadcasting. Everybody just take a big note of what's about to be coming. I mean, maybe you might think I probably threw this question in myself because this is so exciting. Are you ready? Let's talk the energy direct debit cycle. Wow. So, I don't know why I did that.
33:01 Martin Lewis? So, the energy direct debit cycle means those people who are on monthly direct debit, which is the majority of energy bill payers, you pay a set amount each month over a year that's meant to cover your annual usage. Now, of course, the actual amount you use is normally far more in the winter and far less in the summer. That means you will be building up credit in the summer and using excess amounts in the winter. And when you plot the energy direct debit cycle, and it does depend on when you first started with a firm, you basically, for those who remember their school maths, get a sine wave. It's a nice curve that goes up and it goes down. And the crossover points in this sine wave are mid-March and mid-November. So we're not far from one of those crossover points.
33:47 Martin Lewis? Mid-November is the point in the year where you should have the maximum amount of credit because it's basically your barrel of winter energy nuts that you've stored up for hibernation so that you can use them during the high use winter months. And the time in the year when you should have the least energy credit is March. But we're talking November now. So how much credit should you have is the first question. Well, I would say I would have absolutely no problem with someone being two months worth of direct debits in credit. So if your monthly direct debit is £200 a month, then you're going into around this
34:27 Martin Lewis? time of year, it's absolutely fine for you to be £400 worth in credit because that should easily see you through the winter with no problems. I am, of course, assuming that your direct debit is set at the right level. If it's not, then making sure that that is right is crucial as well. So you asked me, should I get my direct debit, my money back? And you have a right for them not to have too much excess credit. The answer is, if you have over two months' worth of excess credit, then I would be getting in touch with your provider, which was British Gas, I think it was in the question, wasn't it? Yep. Getting in touch with your British Gas and saying, I would like... The amount of my credit over two months' worth back in my account. If they say no, you need to make sure they justify it. There are energy direct debit calculators online where you can see if your direct debit is set up
35:12 Martin Lewis? for roughly the right amount for the current usage. As long as that's right and as long as you've been given meter readings, then I would be pushing hard that anything more than two months' worth of credit at the moment is too much credit. Better off in your bank account than their bank account. So you're earning interest on it, not their earning interest. And that's how I do it. Do let me know how you go on. Both what was our question's name? Sorry, give me.
35:33 Speaker 03 What was the question? What was the name of the person asking the question?
35:36 Martin Lewis? Oh, yeah.
35:36 Speaker 03 How could you not remember that?
35:37 Martin Lewis? Did you see? Because I was so into the energy direct debit cycle. It just carries me away in this frisson of excitement that I forgot my own name. So Martin, yeah, you let me know. And anybody else listening, if you try this, let me know how you get on getting credit back. Do let us know. You get in touch with [email protected] . And yes, it is Matt who gets the emails. So lots of you do write, Dear Matt, not Dear Martin. It's fine. I don't mind.
36:02 Speaker 03 It's my favourite thing about opening the email folder.
36:04 Martin Lewis? I can imagine. Maybe we'll survey how many write to me and how many write to you.
36:09 Speaker 03 You would be disappointed with the results.
36:12 Martin Lewis? Vicious.
36:14 Martin Lewis? Now, we're about to go into the next question and you're going to hear a little bit of off air chatter because actually it was quite instructive. So we're keeping it in. So the first bit, as if we didn't know, it was going to be in the pod.
36:25 Speaker 03 Bev, can you hear me?
36:27 Speaker 08 I can, yes.
36:27 Speaker 03 Hi, just to double check, you're asking about your direct debit payment. Yes.
36:32 Speaker 08 I am, yes. And I think roughly Martin's just actually answered my question.
36:36 Martin Lewis? Well, let's hear that. Let's do that.
36:39 Speaker 03 We can still do that.
36:39 Speaker 08 So basically, I joined Octopus Energy in February of this year. And I've been in credit every single month, paid my bills every single month and always left me in credit. But twice now, they've put my direct debit up. So it was just a question as to why are they putting it up if I'm always in credit? But obviously with you saying you're better off to have two months' worth of credit come November is probably answered my question, really.
37:04 Martin Lewis? Yeah. So when did you move? Did you say again? Just.
37:06 Speaker 08 In February.
37:07 Martin Lewis? Okay. So you, as you can see, March is the point where you should have the least credit. So you, by, by chance, when you move in February, something interesting. Remember I described that sine wave before? Oh, I'm just loving this. I'm loving this so much. So this is exciting. So you actually get a change into your curve. Because you moved at the part of the year where you start to build up credit or just before it. You actually don't have a sine wave, Bev. Bev, you have a bell curve.
37:39 Martin Lewis? I know, isn't this wonderful? So for those who aren't with me on a bell curve, instead of it going up and down, what actually happens with you is you sort of, you gradually start to go up in the shape of a bell. Then you peek at the top and you go down and you're very, because you started when you started, you're unlikely, if your direct debit is right, to ever be in debt. What would happen to you at that amount is you would go down in March to zero. You'd have zero credit in February, March next year, if the direct debit is right. That is a big if. And you'll have maximum credit going on roughly in the November period. So, but you may find, do you know how many months' worth of direct debit you are in credit?
38:24 Speaker 08 At the moment, with today's, because my direct debits all go out on the first of the month. With today's, I'm not quite two months' worth.
38:31 Martin Lewis? Yeah, so honestly, I think you're fine.
38:35 Speaker 08 Yeah, so my first direct debit went up in July. My second one is going up as of November, so, but I am currently in credit.
38:42 Martin Lewis? And clearly, this is not an exact science because if we were to have a low, a warm winter, you're not going to use as much energy as you expect. If we have a cold winter, you're going to use more. So, I'm not worried for you, is my easy answer, in a nice way. In a nice way, get on with things, get on with your life, in a good way.
39:02 Speaker 08 Yeah, okay, yeah, I will do. Thank you very much.
39:04 Martin Lewis? Thanks for calling.
39:08 Speaker 03 Oh, Martin, on the back of that, I've got one from at lapib2. My mum is currently a thousand pounds plus in credit with Octopus. Should she cash out?
39:18 Martin Lewis? Exactly the same logic. The answer is yes, unless her monthly direct debit is around £500 a month. So unless it's, you know, that's two months' worth of direct debit. I think that is unlikely unless it's a very large and inefficient house, in which case I would suggest, you know, if her monthly direct debit is £200 a month, that's £400 for two months. I'd be asking for 600 quid back. So yes, yes, yes, is my answer.
39:43 Speaker 03 Right, on to another question, Martin. At Pink Floyd, not the band. If I look at switching websites-
39:49 Martin Lewis? Oh, I'm so bad at music. Dark Side of the Moon?
39:51 Speaker 03 Oh, I'm even worse. I don't know. James is not in.
39:55 Martin Lewis? I see, you won't understand. I've done all this Q and A in this podcast and that's easy, but I'm actually most proud of managing to name a song by any band because I just don't do music. So yeah, Dark Side of the Moon. I'm very cool, move on.
40:10 Speaker 03 If I look at switching websites from Wednesday, do you think they'll have taken into account the price increases?
40:15 Martin Lewis? So the price has gone up today, which is Wednesday. So that question was sent in advance. This is actually a really important note. Because the price cap moves every three months, when you do a comparison, you are doing a comparison based on the current price cap. So if you did a comparison on Tuesday, your savings that you would have been shown would have been based on the price cap, on Tuesday's price cap, not Wednesday's price cap. So they would have been 2% smaller than you'd actually be likely to save over the next three months. But equally important, when you do a comparison now within the October price cap, your price is being compared only against the price for the next three months. And as we know, the price cap moves on a quarterly basis.
40:58 Martin Lewis? So it will change again in January, it'll change again next April, and it will change again in July because it moves every three months. But you don't know, and nobody knows what the price is going to be over the next year, which is what has made comparisons particularly difficult now so many people are on the price cap. So you do have to be careful and know which price you're comparing against. Now, for the next three months, it's pretty easy and as I've already said to you, it is currently predicted, and it's a pretty firm prediction, that the January price cap is going to be somewhere in the same realms as the October price cap. So if you're saving, you get a saving now, then you're pretty sure that's going to continue till the end of March. And then much more loosely predicted it is going to go up after that.
41:39 Martin Lewis? But you know, I think comparison sites should be better at explaining this information and the predictions to you, but not all of them do. So yes, it's always worth being aware what you're comparing against and where it's really interesting actually, and where it can get really naughty. Is if the price cap we know is going down. So there have been times when we know the price cap is, say, dropping by 5% in three weeks' time. And you are doing a comparison and your comparison is telling you you're going to save £300 over the next year based against the current price cap. But the comparison site knows the price cap is dropping 5% in three weeks' time. So in reality, your saving is going to be quite substantially smaller than it's telling you.
42:23 Martin Lewis? And I have actually written to Ofgem about this in the past, saying, I think, you know, effectively because of the way their code works on comparison sites, we're mandating them to missell arguably when you're in a price drop environment. That isn't happening right now, so you don't need to worry about it practically now, but on a sort of political basis, it's worth thinking about that that is a problem in regulation, but then it's not the only one.
42:46 Martin Lewis? That's it for this week. If you've enjoyed it, please tell your friends you've been listening to the Martin Lewis podcast and why not subscribe, then your pockets will be pleased with you. We tend to put out a new episode every Thursday and now Monday too, although this week we're putting the Monday one out on a Thursday, but doing an energy special. And we're not doing the Monday one, but there'll be another normal one next Thursday and then we'll do a special one on the following Monday, which will be question time. If that's all too complicated, you see, just subscribe and you'll get it automatically. That's why I suggest you do it in the first place. I'm here for solutions, not problems. Go with me.
43:32 Speaker 09 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 production team by emailing [email protected] . The offers and rates mentioned in the podcast are correct at the time of recording. However, if you are listening on demand, it's worth double checking as details can date. Remember to subscribe on BBC Sounds and leave us a review however you listen.
44:07 Speaker 00 Sometimes we all need an extra helping hand, especially with a tricky business problem you've been putting off. Claude is the AI for just that. It's the collaborator that understands your entire workflow and thinks with you, not for you. And Claude isn't just for quick questions. Hand it a whole task, like turning a folder of scattered notes into a report, and it does the work and hands back something finished that you can open and edit. Claude can now draft a doc or deck right in front of you, and Claude Design now lives right inside Claude. Describe the website or prototype you're picturing, attach your design system, and it comes back in your own design language, ready to edit right on the canvas. It works with your files and the tools you already use, like Gmail and Slack.
44:53 Speaker 00 And whether you're debugging code at midnight, building a financial model, or strategising your next business move, Claude extends your thinking to tackle the problems that matter. For problems worth solving, get started with Claude at claude.ai/solve. That's claude.ai/solve. And check out Claude Pro, which includes access to all of the features mentioned in today's episode. claude.ai/solve.
45:19 Speaker 10 He's the founder of the Adani Group, one of India's major infrastructure conglomerates.
45:24 Speaker 11 And with interests ranging from ports to airports to power generation and green energy.
45:29 Speaker 10 He's become one of Asia's wealthiest individuals.
45:31 Speaker 11 On Good Bad Billionaire from the BBC World Service, we're delving into the life and fortune of billionaire businessman Gautam Adani.
45:38 Speaker 10 Listen on bbc.com, the BBC app, or wherever you get your podcasts.
Previous Question Time: Is having a pension worth it? Why has my home insurance doubled? And Martin's Mick Jagger history! Next 14 million to get mis-sold car finance compensation! Page updated November 1, 2026 · transcript and summary are machine-generated