Martin Lewis says cut £200 off bills now as Octopus launches 'cheapest no penalty' fix

Martin Lewis is urging energy customers to slash their bills this summer - as many energy firms launch cheap fixes.

Martin issued his latest MSE newsletter with various money saving advice on everything from state pensions to credit card debt this week. One timely tip centres around energy bills, following news that the Ofgem price cap is not expected to drop in October after all, and in fact could see bills rise.

A staggering 65% of British homes are still on the price cap - ie the standard default tariff which is price-controlled by Ofgem. But all 65% could likely save money by switching to a fix instead, many of which are significantly lower than the price cap right now.

In his weekly MSE email, Martin said: "It may be summer, but it's an energy switching sweet spot!

"We now know what energy bills will likely be til the year ends, so can say with some certainty most can cut bills by 12% on the new cheapest fix (typically £200/year less)."

He added: "We're at an interesting moment for the over 65% of Eng, Scot & Welsh homes on a Price-Capped tariff (pretty much all who aren't on a fix or a special deal).

"The Price Cap dropped 7% on 1 July, but now sadly it looks like it won't keep dropping, meaning the cheapest fixes look strong. It's important to understand how it works..."

The price cap is changed every three months by Ofgem, and is based on average wholesale rates for energy for the preceding three month blocks. Right now, we are two thirds of the way through the mid-May to mid-August price assessment period, and the current predictions from analysts Cornwall Insight peg the price cap at a 1.5% rise from October 1.

Among the cheapest deals plucked out by MSE, Octopus Energy is offering a deal called Octopus Energy Fixed July 2025 V5 12 month fix requires no smart meter, and is available as dual fuel, or electricity only or gas only.

The deal is the cheapest deal with no early exit penalty. It saves 4.1% compared to today's price cap (so it'll be an even bigger saving come October). But the upside of the deal is that no early exit penalties means if the situation does change, you can leave the deal with no fees to pay and find a better deal.

MSE says: "Cheapest NO EARLY EXIT PENALTY fix. Save average 4.1% compared with today's Price Cap. There are other fixes cheaper than this we haven't listed, but we've added this as with no exit penalties, it's no risk - you can leave at no cost if things change."

Other top deals include Ecotricity's EcoFixed 1 Year Green Tariff July 25 v6, which would save a whopping 11.6% compared to the price cap, though it will be withdrawn once 2,750 customers hop onto the deal.