Martin Lewis issued a stark warning to every energy customer across the country as he returned to the small screen for a new series of the Money Show Live this week.
New Chancellor Jeremy Hunt announced on Monday he was scaling back the energy support package, with the two-year price freeze now only running for six months. Mr Hunt said the Government will launch a review on how to target support to those most in need after April in a bid to save taxpayers' cash.
This was followed by Business Secretary Jacob Rees-Mogg who opened the second reading debate of the Energy Prices Bill. He told the Commons: "The legislation is crucial to providing immediate support to people and businesses.
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"The domestic scheme, the energy price guarantee, which was announced, is already up and running. This Bill prioritises the legislative underpinnings of that scheme.
"The energy price guarantee will provide support to the end of March 2023, which will be equivalent to an annual bill of £2500 for the typical household. The average unit price for the dual fuel customers on standard variable tariffs subject to Ofgem price cap paying by direct debit will be limited to 34 pence per kWh for electricity and 10.3 pence per kWh for gas inclusive of VAT from the first of October."
The guarantee, which replaced Ofgem’s price cap, prevented bills rising from £1,971 to a predicted £6,000 this winter. However, Martin told viewers that early forecasts from industry analysts at Cornwall Insight, suggest that the nation is facing a 73% hike in gas and electricity bills from April to an estimated £4,350, reports the Daily Record.
Martin issued another to British Gas and EDF customers over their Direct Debits payments. Martin explained how these two energy firms only review Direct Debits twice a year, linked to when customers joined, which means they could be facing a huge rise in their payments next year.
Martin said: “Direct Debits are currently being assessed by some firms on the back of that 27% rise to the energy price guarantee [£2,500], all the major firms are doing it, but there are two I want to point out though.
“British Gas and EDF, big firms there. If you’re a customer of one of those firms, unlike the others, they don’t recalculate your Direct Debit when there’s a price move.
“They just do it at two points in the year - normally the sixth month and one year anniversary of when you joined - which means you may stay on your current Direct Debit for the next few months even though the rate you’re being charged is higher.”
“That means when they do alter your Direct Debit, the increase is likely to be much bigger because you’ve got to catch up.”
However, the founder of MoneySavingExpert.com did offer a solution that could help level payments off and stop the sharp rise when the Direct Debit is reviewed. He said: “In that case, you may want to go online and ask your supplier to increase your Direct Debit now so you’re not going to be hit by that bigger bill shock later.”
Martin also shared checks people can make if your monthly Direct Debit goes up after a pensioner named Yvonne contacted the show about a huge leap in her monthly payments. Yvonne said: “I have just received my new monthly Direct Debit from my energy provider and it has gone from £49 per month to £123 for September and then £181 from October 28th. I am in credit of £200, is this correct, as this will be one week’s pension money.”
Martin explained that most people can expect their bills to double this winter, as energy prices have doubled since last year and that was expected to happen. However, he said there are three checks to make before contacting your energy supplier and asking them to review the amount you are expected to pay.
If you missed this week’s Martin Lewis Money Show Live, you can catch up on ITV Player.
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