Millions of families face a fresh blow to their finances next month as the energy price cap rises by more than £200. But Martin Lewis, founder of MoneySavingExpert, insists the increase is not inevitable for everyone. "I'm afraid we now know the energy price cap is going to rise 13% in July," he said. "But it's important to understand, for many people, that price hike is voluntary."
The reason lies in how the cap works. It only applies to households on a standard default tariff — the one people end up on by doing nothing. Lewis estimates around 60% of households fall into this category, meaning they will be hit automatically unless they switch. For those on a fixed deal or special tariff, the July rise does not apply. "If you're on a fix or a special deal, you're not price capped, so you're not going to see that rise in most cases," he explained.
“Martin Lewis says July's £200+ energy price rise is voluntary for millions on fixed tariffs.”
The timing is critical. The current cap is £1,641 a year for a typical dual fuel household paying by direct debit. A 13% rise would push that to around £1,849, and further increases are predicted for October, with prices expected to stay elevated until at least the end of March 2027. Yet Lewis points to an opportunity: "The cheapest fix right now is up to 3% cheaper than the current April price cap." Locking in such a deal now, he said, means "forestalling all those price hikes" and saving money in the meantime.
The soaring costs are taking a toll beyond bank balances. According to research, four in ten couples argue about their bills. The Iran war is pushing up wholesale prices, on top of years of increases. Meanwhile, a quirk in the electricity market means wind farms are paid to switch off when it is too windy — a cost that hit £1.5bn last year and could reach £8bn a year by 2030. Electricity taxes are five times higher than those on gas, and despite consumption being 20% lower than 20 years ago, the nation is spending £100bn on new pylons. Increasingly, bills pay for pipes and wires rather than actual energy.
Families have already cut back — using 17% less gas and 7% less electricity. Simple measures such as setting a thermostat to 18C instead of 21C can save £90 a year, while adjusting the boiler flow temperature and plugging draughts help. Being on the right tariff is vital: fixed deals protect against rises, and smart tariffs can reward off-peak use. Octopus customers have saved almost £1bn through such tariffs. Solar panels, available through the Government's Warm Home Scheme, can also cut costs, and electric cars now cost £1,000 a year less to run. On windy or sunny days, suppliers run "sales" that millions have signed up to.
But Lewis issued a warning: some comparison sites hide the cheapest tariffs, meaning people can switch and still miss the best deal. He covers how to navigate this properly in his podcast. Financial aid experts Vettory added: "Martin's point about the rise being voluntary is an important one that many people will not have considered." For the 60% still on the default tariff, the clock is ticking before July's increase locks in.