Martin Lewis’ MSE flags ‘one of the cheapest’ energy deals it has seen
Martin Lewis ’ MoneySavingExpert.com team has flagged a new energy tariff which is currently “one of the cheapest available”.
The new E.ON Next tariff costs around £50 a year less than the Ofgem price cap for typical users - but this isn't a regular fix. Instead, it is a one-year fixed discount on the price cap - so its prices can go up and down, unlike a regular fix where you have a set price for the duration of your contract.
“Next Pledge” updates every three months, when the Ofgem price cap is updated. Someone with typical usage will pay £1,870 a year on this tariff compared with £1,923 a year on the price cap from October 1. But the MoneySavingExpert.com team added: “Your actual bill and rate will depend on usage and region.”
This means you may pay more or less than this, depending on how much energy you use, as both the Ofgem price cap and “Next Pledge” put a cap on your unit rates and standing charges, rather than capping your actual energy bill. The unit rate per kilowatt hour (kWh) for gas on “Next Pledge” will be 6.88p from October, compared to 7.10p on the price cap. For electricity, you’ll pay 26.26p with E.ON Next, versus 27.18p on the price cap.
In terms of standing charges, with E.ON it will be 29.11p for gas and 58.28p for electricity, then with the price cap, you’d pay 29.11p for gas - so the same - and 58.70p for electricity.
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“Next Pledge” is only available to existing E.ON Next customers, and once you’ve signed up, you’ll be locked in for one year. If you want to leave before then, you’ll need to pay £50 if you’re a dual fuel customer, or £25 for electricity-only households.
MSE said the E.ON tariff is a “no brainer” if you're planning to stay on the energy price cap and you're already an E.ON customer. They said: “We know that the energy price cap will fall by 7% from 1 October compared with July to September rates.
“It's then predicted to rise slightly from 1 January 2024, then fall in April and again in July. We don't yet know any unit rates beyond 31 December 2023 but we've predictions from analysts based on current wholesale prices, which are used to determine the cap.”
However, MSE said it is “trickier to compare is whether you could save more by fixing” as most fixes are only available to existing customers, which means it is hard to compare other deals. They said: “Our current best guess, based on today's predictions of the price cap over the next 12 months, is that only fixes more than 5% below July's price cap are likely to be worth considering and that number also depends on current predictions being right).”
The only fixed tariff flagged by the MSE team as “likely worth considering” is the Octopus Energy “Loyal Octopus” deal, which is around 8% less than the July price cap.
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