MARTIN Lewis has warned millions of households could be plunged into poverty ahead of the next Budget.
The MoneysavingExpert.com (MSE) founder has written to the Chancellor calling for April’s planned energy rise to be postponed.
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The average bill is expected to rise from £2,500 to £3,000 on April 1 but Martin said that is no longer necessary as wholesale prices have “come down very substantially”.
In the letter to the Chancellor, he said: “It just seems to me there is no need to do this.
“If we postpone this rise it is likely from July, wholesale prices will have gotten to the price cap and if the energy price cap which is set by the regulator and is dictated by wholesale prices, is lower than the energy price guarantee we pay the lower amount, and that is likely to happen from July.”
Martin said: “To put this national act of harm of increasing the price guarantee for just three months, to throw another 1.7million people into fuel poverty taking it to 8.4 million, it seems unnecessary.”
He said any cancellation would have to happen before the March Budget because by then people will have had letters telling them their bills are going up.
Speaking on BBC Radio 4’s Today programme this morning he said: “This is the one pricing mechanism that is fully in the government’s control and it is choosing to put it up on the 1st of April.
“It would be a good idea for everybody if he [Jeremy Hunt] postponed that and we crossed our fingers that wholesale prices stayed low.”
He also said that the Chancellor needs to act before the Budget, as otherwise energy firms will have already sent out letters to customers and started hiking direct debits.
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The letter, which was sent this morning, is supported by charities including Citizens Advice, National Energy Action and StepChange.
Wholesale energy prices have tripled due to the war in Ukraine, causing the government to subsidise bills for households.
But analysts now say wholesale prices are falling, which means that the average bill could hit £2,200 from July.
However, bills are currently protected by the energy price guarantee, which means that they might not fall at this point.
As well as capping the average cost of energy for households, the government has paid for every UK household to have a £400 discount on bills – but this ends in March.
From April the support will only help low income and elderly households, while others will have to pay an average of £3,000 a year.
HM Treasury said that if prices return to what they were in August, the government would need to borrow an extra £42billion.
It means that taxes could potentially increase in order to continue funding the Energy Price Guarantee at current levels, according to the HM Treasury.
What other help is available?
As part of the Autumn Statement, it was revealed millions on benefits and Universal Credit will receive an extra one-off £900.
Eight million households have already received cost-of-living payments worth up to £650.
Pensioners have also started getting a £300 one-off payment.
The current pensioner cost of living payment is being handed out to millions on a low income.
You qualify under the current rules if you normally get the winter fuel payment, but this could change under the new rules.
The £300 cost of living payment is paid on top of the other winter support.
Struggling families are eligible for the Warm House Discount to help them tackle the cost of living.
There are also plenty of energy grants and schemes open to help you out if you’re struggling:
- British Gas Energy Trust Individuals and Family Fund
- British Gas Energy Trust
- EDF Customer Support Fund
- E.ON and E.ON Next Grants
- Octopus Energy Assist Fund
- OVO Energy
- Scottish Power Hardship Fund
There’s also a one-off fuel voucher from your energy supplier if you’re on a prepayment meter.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
