Martin Lewis has shared his "provisional analysis of what may be coming" following reports that Liz Truss plans to freeze energy bills.
The new Prime Minister is reportedly expected to freeze energy bills at around £2,500 ahead of the energy price cap increase on October 1. Energy regulator Ofgem previously confirmed that the price cap would soar to £3,549 in October, with experts predicting it could rise above £5,000 in January.
According to Martin Lewis, the Prime Minister's plans to freeze the price cap at its present level would "help substantially" in the face of the impending energy "catastrophe".
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Taking to Twitter, the MoneySavingExpert founder shared his "rough provisional analysis" of the plan, detailing how it may impact households across the country.
Lewis wrote: "Energy firms met the new Liz Truss administration yesterday, and it's strongly rumoured that top of the agenda was freezing the price cap at its current level and adding small business to the cap too. This is similar to suggestions made by the main opposition parties - though likely to be funded in a different way.
"Mutterings are any announcement will come on Thursday, so thought it was worth speedily and scruffils bashing out a dozen preliminary thoughts while the policy may be being formulated.
"Millions desperately need help. The planned 80% energy price cap rise set for 1 October in Eng, Scot & Wales is a catastrophe, that's only set to worsen in January with a further predicted 50% rise, taking a typical bill then to €5,400/yr (we're seven months through the 10 month assessment period, so this figure is likely in the right ballpark).
"Predictions after that are more difficult, but still likely very high, unless we see an end to the war in Ukraine, or there is worldwide economic recession."
He continued: "Freezing the price cap now would help substantially. I have longly and strongly been calling for further Government intervention. Yet whenever asked, I have been careful to be agnostic over the method used to help - as my prime concern has been trying to ensure there was a will to do something more.
"Freezing the price cap at its current level certainly fulfils that brief, so l absolutely would welcome it. It would go a decent way to mitigate further short-term damage, and the risk to health and mental health, causing a sigh of relief for many.
"Yet we must accept doing it this way may turn out to be expensive for the public finances, and is certainly far from targeted.
"The big benefit, and problem, of this is (almost) everyone gets it. In past conversations with Rishi Sunak when he was Chancellor, he recognised both practically and politically that while you had to focus help to the poorest and most vulnerable, in doing so, some on low to middle incomes would feel they had unfairly missed out. That is even more so now, with cost rises so large, many middle earners will find it hard to manage. By freezing the cap you spread the help net very wide."
"However that means the benefit goes to every bill payer, including wealthy people (yes, like me). And those who gain the most from it in cash terms will be those with the highest bills (many, though not all, will be at higher income levels), so clearly it isn't targeted at helping those who need it most."
Lewis added: "We're freezing at the current level, but that is already high. If we freeze now, we have already seen the price cap rise 50%, so we're freezing at a high level (and higher than some other countries have).
"It would mean this winter's bills would be running at roughly a £2,000/yr for typical usage compared to last winter's £1,300/yr. That is not an insubstantial difference and is a struggle for many.
"Yet there is a balance to be had here - of how much government can do in the face of huge international hikes in bills. Compared to the status quo, where an average horrific 150% further rise is currently predicted over the next 12 months. This will be a huge cost reduction for people."
For Lewis's full analysis, read his tweet here.
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