Money saving expert Martin Lewis has offered three possible scenarios on what the energy price guarantee's early end could mean for people on fixed tariffs. This comes after the new Chancellor Jeremy Hunt announced on Monday (September 17) that help with energy bills for all households will only last in its current form until April.
As part of a series of U-turns on the mini budget announced by his predecessor Kwasi Kwarteng, Mr Hunt said a review will look at a "new approach" to target support at those worst off after that. The Chancellor has also announced the UK Government will scrap plans to reduce the basic rate of income tax from 20% to 19% in April next year, a move that had been forecast would cost the Exchequer almost £5.3 billion in 2023-24.
Speaking on Monday morning, Mr Hunt confirmed he is ditching many of the measures in the mini-budget to stop speculation. He said the changes were designed to bring "confidence and stability". You can read more about Jeremy Hunt's mini-budget tax changes here.
Read more: Martin Lewis demands four point emergency mortgage plan from Jeremy Hunt
In response to Mr Hunt's reversal of the mini-budget, however, the founder of MoneySavingExpert Martin Lewis shared his thoughts on what would happen to those on fixed tariffs come April of next year. "This is my best-guess based on what we know so far," he tweeted. "It depends on which of three camps you're in...".
Firstly, he noted that nothing would change for those on a fix below the guarantee and their fix would remain for full term. Secondly, he said that those on a fix higher than the guarantee rate, but which was reduced by up to 4p per kWh gas, 14p per kWH of electricity, would drop that person into the price guarantee rate category.
"It's likely this reduction ends in [April]... Some firms moved people in this position to standard tariffs, no idea legal position on that yet," he added.
Thirdly, he addressed those that were on a fixed tariff that was also reduced by the 4p per kWh gas, 14p per kWh electricity but were still left higher than the guarantee rate. He said: "You can switch penalty free til Nov to your provider's price guarantee tariff. It's still likely worth doing it as, energy prices dropped, but I need [to] do more analysis".
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