Ovo has become the first major energy supplier to offer a fixed tariff deal below the UK Government’s £2,500 cap. The energy giant is offering a one-year fixed tariff of £2,275 to existing customers - undercutting the UK Government’s £2,500 Energy Price Guarantee.However, Martin Lewis, who was instrumental in persuading the UK Government not to increase the Energy Price Guarantee to £3,000, is urging people to be “very careful not to just jump on a fix because it costs less than they're paying right now”.
That’s because wholesale rates have dropped and industry experts predict that the Price Cap will also drop.The Energy Price Guarantee reduces, compared to the undiscounted price of energy, the amount people can be charged per unit of gas or electricity, to an annual equivalent of around £2,500 for a typical household.
Chancellor Jeremy Hunt committed to keeping the Energy Price Guarantee at £2,500 from April to June, after it had been due to rise to £3,000 from April 1.Ovo, which has around four million customers, reportedly said it launched its new tariff because customers desired “the security of a long-term fix to protect them against the continuing energy price uncertainty”.
But in a statement shortly after the fix announcement, the founder of MoneySavingExpert.com, said: “People need to be very careful not to just jump on a fix because it costs less than they're paying right now.Read more on dailyrecord.co.uk