As energy bills are set to increase in October 2025 by 2%, millions will be looking for the best deals for gas and electricity bills.
Ahead of the announcement, when it was predicted to be a 1%, Martin Lewis urged customers to get off the Energy Price Cap - or the 'pants cap', as he calls it, and fix on a better deal. Now that message is even more important.
The Money Saving Expert founder added that the cheapest fix depends on where you live and how much you use, so urged billpayers to do a comparison.
He tweeted today: "Tomorrow's Energy Price Cap announcement is sadly likely to be a 1% RISE on 1 Oct. If you're not on a fix, consider it asap. Ofgem's Price Cap dictates the rate all homes, except in Northern Ireland, on standard tariffs pay.
"That’s the 2/3rd of domestic properties who aren't on fixes or special deals. It is a pants cap, most on it could save £100s by ditching it (more help below) The average of four analyst firms predictions is that a rise of 1.4% will be announced tomorrow. So with wriggle room lets say it'll be up 0.5% to 2%ish."
NEWS (before it happens)! Tomorrow's Energy Price Cap announcement is sadly likely to be a 1% RISE on 1 Oct. If you're not on a fix, consider it asap.
— Martin Lewis (@MartinSLewis) August 26, 2025
Ofgem's Price Cap dictates the rate all homes, except in Northern Ireland, on standard tariffs pay. That’s the 2/3rd of… pic.twitter.com/pU0zWX0aIc
What is the best energy price fix to beat the cap?
Martin Lewis says to choose the best-fixed deal, customers should use a comparison site that takes in the whole market by default rather than cutting out some suppliers who do not pay to be listed. He recommended his own Cheap Energy Club, as it compares all energy deals, rather than just the sponsored options.
He posted today: "The Price Cap moves with average wholesale rates (those energy retailers pay) over a 3mth period. Hopefully the graphic I've had designed shows the problem. It's also set with a time-lagged. The 1 Oct to 31 Dec Price Cap change is dictated by wholesale rates from 19 May to 18 Aug.
"That’s how come Oct’s cap can be announced so early. As you can see, there was a spike mid assessment period (mainly over US tariffs and Ukraine fears) which pushed the average up, without that we’d probably be seeing a small fall.
"The cap is a pants cap, most in it can save nearly 15% by fixing."
How to get a better deal for gas and electricity
"Switch to a fix and your energy use immediately costs less, and will continue to do so until at the very least the 31 Dec," says Martin.
"Yet the extremely strong likelihood is you’ll continue to save substantially after that too. Analyst's current predictions are that the cap will drop slightly in Jan (down 2%ish) then a rise again in April (up 5% ish).
"Though this is far more crystal ball gazing than the October prediction."
What is the energy price cap?
The term is quite confusing and it's important to note it's not the maximum price you will pay - it's an average. If you use more, you will pay more.
The cap was introduced on January 1 2019 by regulator Ofgem, with the aim of preventing the millions of households on expensive variable tariffs from being ripped off.
But it only limits what you pay for each unit of gas and electricity that you use.
It's based roughly on wholesale energy prices (those that firms pay) and applies only to providers' standard and default tariffs, which the vast majority of households are now on.
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Warm Home Discount
An extra 2.7 million households will qualify for the Warm Home Discount this winter - but their name must be on the bill to qualify automatically.
Millions more people will now be eligible for £150 off their bills, helping ease the cost of living.
These are the main means-tested DWP benefits:
- Housing Benefit
- Income-related Employment and Support Allowance (ESA)
- Income-based Jobseeker’s Allowance (JSA)
- Income Support
- Pension Credit (Guarantee Credit and Savings Credit)
- Universal Credit
In England and Wales, this means households in receipt of Housing Benefit, Income-related Employment and Support Allowance, Income-based Jobseeker’s Allowance, Income Support, Pension Credit and Universal Credit will now be eligible.
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