Martin Lewis has shared a bleak warning to consumers throughout Scotland and the UK following Chancellor of the Exchequer Jeremy Hunt’s announcement that the energy price guarantee will stop in March 2023.
The MoneySavingExpert founder took to Twitter to inform his followers that their energy bills could soar to £4,350 starting next April. He revealed that the projected price cap following six months of the temporary limit may rise by 75 per cent on average.
However, as reported by the Daily Record, Lewis continued that under these same forecasts, bill are predicted to fall by 15 per cent in July to £3,700 a year.
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The forecast is from energy analysts Cornwall Insight, whose predictions have been consistent with Ofgem’s official price cap over the last year. Lewis stressed that, since we have not yet entered the April assessment period, these predictions may "change a lot".
Posting to Twitter, Lewis wrote: “NEWS: The projected new energy price cap, that will start in April when the price guarantee ends, will be:
“UP 73% taking a bill for typical use (use more pay more use less pay less) from £2,500/yr to £4,350
“The cap will then be DOWN 15% in July to £3,700/yr typical use.”
He added: “Then it is predicted to stabilise around that level. However these are very early day predictions (thanks to @CornwallInsight for getting them to us so quickly), we are not even in the April cap assessment period (17/11 to 17/2) yet, so could change a lot.”
The financial expert continued: “If these are in the right ballpark, the promised 'targeted help' will need to be targeted up into middle incomes for people to get through this. Especially if it stays at those levels for the next winter.”
He also explained that “this is subject to the fact that the price cap in its old form will continue which is the standard working assumption, but not yet confirmed”.
Jeremy Hunt stated on Monday that he and Prime Minister Liz Truss had "reluctantly" agreed not to continue the energy price guarantee after next April.
Speaking to the Commons, Hunt said: “The third step I’m taking today, is to review the energy price guarantee. It is the biggest single expense in the growth plan and one of the most generous schemes in the world, it’s a landmark policy for which I pay tribute to my predecessor, my right honourable friend from Spelthorne and it will support millions of people through a difficult winter reducing inflation by up to 5 per cent."
He added: “So I confirm today that the support we are providing between now and April next year will not change.
“But beyond next April, the Prime Minister and I have reluctantly agreed it would not be responsible to continue exposing the public finances to unlimited volatility in international gas prices.
“So I’m announcing today a Treasury-led review into how we support energy bills beyond April next year, the review’s objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.”
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