MARTIN Lewis has revealed what the Budget announcement on energy will mean for households up and down the country.
Jeremy Hunt has unveiled his “back to work” rescue plan to help Britain avoid a recession.
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Announcing more childcare support and Universal Credit boosts, he also addressed the rising energy bills.
The Chancellor has said energy firms will not be allowed to charge people with prepayment meters any extra fees.
The shake-up of the rules are expected to slash the costs for millions.
It’s also been confirmed the planned 20 per cent Energy Price Guarantee bill for April has been postponed.
It comes after Martin sent a letter to Mr Hunt asking for it to be pushed back to July as it would be an act of “national harm” and damage the economy.
The money saving expert has since explained what this will mean for Brits.
Spring Budget at a glance
He said: “A postponement means a cancellation.
“There are two rates that for the last year or so have been controlling what we pay on our energy bills.
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“For a long time it was the energy price cap set by Ofgem based on wholesale rates – the prices that energy firms pay for energy.
“That was going up and up and up and it was becoming concerning.
“The intervention the Government chose to do is introduce the energy price guarantee which is a subsidy on energy bills.”
Martin explained during the winter months the energy price cap would have been over £4k – but the energy price guarantee was £2.5k.
He added: “The rule is simple, whichever of these is lower is what we pay.
“The energy price cap has come down and the one in April is around £3.2k.
“The energy price guarantee is still £2.5k but it was set to rise to £3k.
“But because wholesale rates have come down, the current prediction is in July, the energy price cap will drop to just over £2k, lower than the energy price guarantee.
“That means the energy price guarantee, which lasts through until April 2024, is no longer relevant from July.”
What does this mean for your bills?
Martin explains having the increase postponed means throughout April, people’s bills will remain roughly the same.
The 20 per cent hike was also due around the same time everyone loses out on winter bill support.
Martin said: “From July we expect prices to drop from the current rate.
“Now the prediction is it will drop by 19 per cent – now there is some crystal ball gazing in there, it may vary.
“I think it’s unlikely we wont see at least some form of drop on bills in July.
“So what are the actual rates you pay going to be?
“We know the price cap for April – but we don’t know the energy price guarantee.”
He said direct debit rates on the standing charge will rise by about 6p in July.
However, the unit rate will drop.
The unit rate is the price you pay per unit of gas and electric used in your home – for example you will pay 33.2p per kwh used.
The standing charge is a fixed daily amount you have to pay for energy, regardless of how much you use.
Martin added: “We know the standing charge will rise again from 46.4p to 53p a day.
“But because that is rising – the unit rate you’re paying will fall from 34.04p to 33.2p.”
The gas standing charge is also expected to rise but not by a lot.
It’s currently priced at around 28.5p per day and will make a slight leap to 29.1p.
The unit rate will slightly decrease as well from 10.33p to 10.3p, Martin predicts.
Martin added: “There is a slight increase for lower users because the standing charge has gone up and a slight decrease for high users because the unit rate has gone down.
“Right now I’m just very pleased that this campaign means that people’s bills won’t be going up by 20 per cent.
“Though you will still be paying more because you’ll no longer have the £66 or £67 a month.”
This post first appeared on thesun.co.uk
